QUESTIONS   OF   THE    DAY 

r 

I  REESE   LIBRARY 

I    UNIVERSITY  OF  CALIFORNIA. 

,  liermei         MAR   14  1893  '^'- 

1  <■      - 

i    Accessions  No.^Ob'Zq. .      Class  No. 


C.  Ford.  Part  I. — Governments  (Kational-,  State,  and  Local),  the 
Electorate,  and  the  Civil  Service.  Pa7-t  JI. — The  Functions  of 
Government,  considered  with  special  reference  to  taxation  and  ex- 
penditure, the  regulation  of  commerce  and  industry,  provision  for 
the  poor  and  insane,  the  management  of  the  public  lands,  etc. 
Two  vols,  in  one.     Cloth      .         .         .         .         .         .         .125 

7 — Spoiling  the  Egyptians.  A  Tale  of  Shame.  Told  from  the 
British  Blue-Books.     By  J.  Seymour  Keay.     Octavo,  cloth,         75 

8 — The  Taxation  of  the  Elevated  Railroads  in  the  City  of  New 
York.     By  Roger  Foster.     Octavo,  paper  25 

9 — The  Destructive  Influence  of  the  Tariff  upon  Manufacture  and 
Commerce,  and  the  Figures  and  Facts  Relating  Thereto. 
By  J.  ScHOENHOF.  Octavo,  cloth,  75  cents  ;  paper  40 

10— Of  Work  and  Wealth.  A  Summary  of  Economics.  By  K.  K. 
BOWKER.     Octavo,  cloth 75 

1 1— Protection  to  Young  Industries  as  Applied  in  the  United 
States.  A  Study  in  Economic  History.  By  F.  W.  Taussig. 
Octavo,  cloth       ,  ........         75 

12 — Storage  and  Transportation  in  the  Port  of  New  York.  Hy 
W.  N.  Black.     Octavo,  paper 25 


G.  P.  PUTNAM'S  SONS,  Publishers,  New  York  and  London. 


QUESTIONS   OF   THE    DAY 

V 

13 — PuTjHc  Relief  and  Private  Charity.    By  Josephine  Shaw  Lowell. 

Octavo,  cloth,  75  cents  ;  paper  .  ,  .  .  .  .  40 
14 — "  The  Jukes."    A  Study  in  Crime,  Pauperism,  Disease,  and  Heredity. 

By  R.  L.  DuGDALE.     Octavo,  cloth i  00 

15 — Protection    and    Communism.       By   Wm.   Rathdone.      Octavo, 

paper 25 

16 — The  True  Issue.  By  E.  J.  Donnell,  Octavo,  paper  .  .  25 
17 — Heavy  Ordnance  for  National   Defence.     By  Wm.   H.  Jaques, 

Lieut.  U.  S.  Navy.     Octavo,  paper 25 

18— The   Spanish  Treaty  Opposed   to  Tariff  Reform.     By  D.  H, 

Chamberlain,   Jno.   Dewitt  Warner,   Graham  McAdam,  and 

J.  Schoenhof.     Octavo,  paper 25 

19— The  History  of  the  Present  Tariff.     By  F.  W.  Taussig.     Octavo, 

cloth      ...........  75 

20 — The    Progress    of   the  Working    Classes  in    the    Last    Half 

Century.     By  Robt.  Gifp'EN.     Octavo,  paper  .         .25 

21 — The  Solution  of  the  Mormon  Problem.     By  Capt.  John  Godman. 

Octavo,  paper        .........         25 

22— Defective    and    Corrupt     Legislation;     the    Cause    and    the 

Remedy.  By  Simon  Stkrne.  Octavo,  paper  .  .  .  25 
23 — Social  Economy.  By  J.  E.  Thorold  Rogers.  Octavo,  cloth,  75 
24 — The  History  of  the  Surplus  Revenue  of  1837.      %  Edward  G. 

Bourne.     Octavo,  cloth i  25 

25— The    American    Caucus    System.       By   George  W.    Lawton. 
Octavo,  cloth,  $1.00;  paper  ......          50 

26 — The  Science  of  Business.  By  Roderick  H.  Smith.  8vo,  cloth,  i  25 

27 — The   Evolution    of    Revelation.      By  James    Morris    Whiton, 

Ph.D.     Octavo,  paper  .......         25 

28— The  Postulates  of  English  Political   Economy.     By  Walter 
Bagehot.     Octavo,  cloth i  00 

G.  P.  PUTNAM'S  SONS,  Publishers.  New  York  and  London. 


Digitized  by  the  Internet  Archive 

in  2007  with  funding  from 

IVIicrosoft  Corporation 


http://www.archive.org/details/federaltaxesstatOOjonerich 


QUESTIONS  OF  THE  DA  V.     No.  XXXIX. 

FEDERAL  TAXES  AND 
STATE  EXPENSES 


THE  PUBLIC  GOOD,  AS  DISTINCT  FROM  THE  GENERAL  WELFARE 
OF  THE  UNITED  STATES 


By  WILLIAM  HITER  JONES,  A.M.,  B.L. 


And  now  I  will  unclasp  a  secret  book, 
And  to  your  quick-conceivings  discontents 
I  '11  read  you  matter  deep  ana  dangerous ; 
As  full  of  peril  and  advent'rous  spirit. 
As  to  o'erwalk  a  current,  roaring  loud. 
On  the  unsteadfast  footing  of  a  spear. 

O  !  the  blood  more  stirs. 
To  rouse  a  lion  than  to  start  a  hare. 

—First part  of  KING  HENRY  IV., 

Act  I.,  Sc.  Ill, 


SECOND  EDITION,  REVISED 


NEW    YORK    &    LONDON 

G.     P.     PUTNAM'S    SONS 


rNIVERSITY 


r^b'^ 


,i\i 


COPYRIGHT   BY 

G.  P.  PUTNAM'S  SONS 
1890 


TTbc  Iknicfeerbocfter  pvees,  Hew  II?ort 

^lectrotyped  and  Printed  by 
G.  P.  Putnam's  Sons 


Department  of  Justice, 
Washington,  July  29,  1887. 


Wm.  H.  Jones,  Esq., 
Fort  Wayne,  Ind. 


Dear  Sir : 

I  thank  you  very  much  for  your  little  work,  Federal  Taxes 
and  State  Expenses,  just  received  on  yesterday.  I  have  read 
it  carefully  and  with  great  interest.  It  presents  the  questions 
in  strong,  cogent,  and  apt  style,  and  if  circulated,  must  serve 
to  awaken  thought  and  stimulate  inquiry  on  subjects  not  less 
important  to  the  country,  than  any  that  can  be  discussed  ;  and 
you  have  done  good  work  in  this  presentation  of  them. 

Very  truly  Yours, 

A.  H.  Garland. 


From  The  American,  Phila.,  Oct.  13,  1887. 

Whether  Mr.  Jones  is  a  Republican  or  a  Democrat,  a  Free- 
Trader  or  a  Protectionist,  we  are  glad  to  say  does  not  appear 
in  his  book.  It  has  the  important  merit  of  discussing  this 
problem  of  finance  entirely  apart  from  the  current  questions 
of  our  party  problems.  What  brings  him  to  the  subject  is  the 
patent  fact  of  the  financial  needs  of  the  States  under  the 
present  system  of  taxation. 


INSCRIBED 

TO  THE 

Honorable  AUGUSTUS  H.  GARLAND 

LATE   ATTORNEY-GENERAL   OF   THE   UNITED    STATES 


IN   GRATEFUL   ACKNOWLEDGMENT   OF    HIS   GENEROUS   ENCOURAGEMENT  TO 
THE  AUTHOR  TO   UNDERTAKE  THIS  WORK 


PREFACE  TO  THE  SECOND  EDITION. 


If  explanation  be  needed  for  publishing  a 
second  edition  of  "  Federal  Taxes  and 
State  Expenses,"  it  may  suffice  to  say,  that 
the  distinction  between  "  The  Public  Good,'' 
and  the  "  general  welfare  of  the  United  States," 
now  for  the  first  time  attempted  to  be  supplied, 
is  deemed  by  the  author  a  sufficient  one.  From 
whatever  cause  the  existing  lack  of  distinction 
between  these  seemingly  like,  but  essentially 
different  subjects  may  have  arisen,  it  cfannot 
be  denied,  that  the  difference  between  them 
has  not  hitherto  been  marked  with  the  clearness 
necessary  to  its  being  readily  understood.  The 
line  of  separation  between  them  has  been  so 
obscure,  and  the  two  essentially  different  sub- 
jects so  generally  confounded,  that  the  author 
has  thought  the  attempt  to  mark  and  separate 
them,  at  least  to  the  approval  of  the  Lawyer, 
the  Statesman,  and  the  Legislator,  if  not  to  the 
popular  apprehension,  was  at  least  worth  the 
attempt ;  however  faulty  the  attempt  may 
prove.     Even  positive  failure  may  produce  the 


viii        Preface  to  the  Second  Edition, 

effect  to  challenge  some  one  else  to  try  for 
more  successful  results. 

Besides  this  attempt  to  distinguish  ""  The 
Public  Good  "  from  the  '*  general  welfare  of  the 
United  States,"  the  author  has  also  essayed  the 
more  difificult  task  of  giving  exact  definition  to 
the  latter  term,  as  the  same  is  employed  in  the 
Constitution  to  define  both  the  nature  and 
extent  of  the  federal  power  of  taxation  in 
regard  to  it. 

To  such  as  have  found  fault  with  the  first 
edition,  from  misconception  of  the  subject  of 
it,  as  stated  in  the  title-page,  the  author  takes 
this  occasion  to  say,  that  what  are  commonly 
called  "  the  principles  of  taxation T  are  outside, 
and  apart  from  the  subject  of  the  book.  It  is 
only  with  the  subjects  of  taxation,  and  the  con- 
stitutional and  politic  exercise  of  the  power  of 
taxation  over  them  as  implied  in  the  title,  that 
the  author  has  undertaken  to  deal.  These 
topics  are  paramount  over  all  others,  and 
'*  the  principles  of  taxation  "  (whatever  these 
may  be)  are  wholly  subordinated  to  them 
throughout ;  and  whenever  referred  to,  the 
reference  to  them  is  always  incidental,  and  is 
never  essential.  In  fact,  while  the  author  has 
heard  or  read  much  of  both  declamation  and 
dissertation,  about  '*  the  principles  of  taxation^' 
he  has  not  been  able  to  learn  from  it  all,  any 
more    than    the    declaimers    and    dissertators 


Preface  to  the  Second  Edition.  ix 

themselves  seem  to  know  about  them  :  and,  (be 
it  said  without  intent  to  offend,)  that  is  very 
Httle.  It  seems  never  to  have  occurred  to  any 
of  them,  that  during  our  hundred  years  of 
national  existence,  nothing  in  the  nature  of 
distinctive  "  principles  of  taxation,"  derived 
from  our  own  experience,  and  adapted  to  the 
needs  of  the  system  of  Federal  government,  as 
distinguished  from  the  monarchial  systems  of 
both  mediaeval  and  more  modern  Europe,  has 
been  developed  and  so  systematized  as  to  guide 
us.  All  "  the  new  wine "  of  this  large  ex- 
perience has  been  continually  put  into  "  the 
old  bottles,"  "  brought  over  "  by  the  Cavalier  to 
Jamestown,  the  Pilgrim  to  Plymouth  Rock,  the 
Roman  Catholic  to  Maryland,  the  Quaker  to 
Pennsylvania,  and  the  Salzberger  to  Georgia: 
thus  named  with  no  other  significance  than  the 
order  of  their  coming;  for  where  all  is  either 
defective  or  unsuitable,  it  were  invidious  to 
assign  pre-eminence. 

The  principles  of  taxation  under  federal  insti- 
tutions is  a  subject  in  and  of  itself;  and  too 
great  to  be  properly  treated  in  the  narrow 
compass  of  a  little  volume  such  as  this;  and 
the  subject  of  "  Federal  Taxes  and  State  Ex- 
penses^'' is  but  as  a  patch  on  the  surface  of  the 
broad  domain  of  Public  Law  pertaining  to 
federal  institutions.  For  there  is  a  Public  Law 
pertaining  to  federal  institutions,  as  there  is  an 


X  Preface  to  the  Second  Edition, 

essentially  different  one  pertaining  to  mon- 
archies ;  but  failing  to  systematize  and  apply 
our  own,  we  have  gone  on  continuously  for  a 
hundred  years,  practising  ''  the  principles  of 
taxation  "  derived  from  European  monarchies, 
however  unfitted  to  federal  forms,  or  illy 
adapted  to  the  needs  of  the  national  existence. 
Though  highly  inventive  in  other  fields  of  dis- 
covery, our  genius  for  invention  seems  to  have 
wholly  failed  us  in  this  one — perhaps  the  most 
important  of  them  all. 

When  the  researches  and  investigations  of 
Copernicus  had  announced,  and  those  of  Galileo 
with  his  telescope  subsequently  demonstrated, 
the  movement  of  the  planets  round  the  sun,  a 
great  advance  was  made  in  the  science  of 
astronomy,  over  what  it  had  been  as  known 
and  practised  by  the  mere  fortune-telling 
astronomers  of  their  time.  But  great  as  was 
this  advance,  it  was  not  until  the  laws  govern- 
ing the  exact  movements  of  the  planetary 
bodies  had  been  discovered  and  announced  by 
Kepler,  that  the  system  first  announced  by 
Copernicus,  and  afterwards  demonstrated  by 
Galileo,  attained  its  full  completeness  and  ex- 
cellence. In  like  manner  the  establishment  of 
the  Federal  Constitution,  like  the  first  discovery 
of  the  Copernican  system  of  astronomy,  though 
in  itself  a  mighty,  if  not  a  marvellous  advance 
on    pre-existing   systems   of   government,   yet 


Preface  to  the  Second  Edition.         xi 

needs  some  such  discovery  and  application  of 
the  laws  governing  its  movements  and  opera- 
tions, as  was  supplied  to  the  science  of  astron- 
omy by  what  has  since  retained  the  name  of 
"  Kepler's  laws  "  ;  which  demonstrate  that  the 
movements  of  the  planets  round  the  sun  de- 
scribe an  Ellipse,  instead  of  the  Circle  supposed 
by  both  Copernicus  and  Galileo.  And  as  with- 
out knowledge  of  the  laws  discovered  by 
Kepler,  it  were  impossible  to  account  for  the 
alternations  of  heat  and  cold  and  the  vicissitude 
of  the  seasons  in  the  solar  system,  so  it  is  im- 
possible to  properly  adjust  the  alternations  of 
benefit  and  burden  and  the  ever  constant 
vicissitude  of  prosperity  and  adversity  in  the 
wide  extent  of  the  Federal  jurisdiction,  without 
corresponding  knowledge  of  the  laws  which 
produce  and  govern  them. 

It  is  to  the  task  of  discovery  and  application 
of  these  laws,  that  the  author's  aims  have  been 
directed ;  with  what  measure  of  success  or 
of  failure,  is  now  submitted  to  the  impartial 
judgment  of  his  readers,  by 

The  Author. 

September  4,  1889. 


PREFACE. 


When  the  investigations  which  have  resulted 
in  the  little  volume  now  submitted  to  the  pub- 
lic were  begun  by  the  author  in  1882,  he  had 
no  idea  of  reaching  as  their  result  the  con- 
clusions stated  in  the  twelfth  chapter.  Hav- 
ing been  mainly  influenced  in  the  beginning 
of  his  work  by  the  high  rate  of  State  taxes 
on  property  valuations  for  State  and  local-  ex- 
penses of  the  civil  administration,  his  efforts 
were  long  directed  to  the  vain  attempt  to 
secure  a  remedy  for  the  difficulty  by  harmo- 
nizing State  and  Federal  cooperation  over  the 
subjects  of  State  taxation.  This  course  at  first 
seemed  the  only  one  that  could  afford  ground 
for  hope  of  lessening  State  taxes  on  property 
valuations,  under  existing  theories  of  the  Fed- 
eral Constitution  and  the  long-established  prac- 
tice in  all  the  several  States  concerning  these 
theories ;  and  traces  of  these  views  will  be  found 


xiv  Preface. 

in  some  parts  of  the  volume,  where  they  have 
been  purposely  left  as  marking  the  course  of 
investigation  rather  than  as  expressing  con- 
clusions. When,  however,  the  author  had 
more  fully  realized  the  difficulties  in  the  way 
of  concurrent  exercise  of  State  and  Federal 
powers  of  excise  taxation  over  subjects  to 
which  each  had  equal  constitutional  right, 
he  was  constrained  to  make  the  distinction 
between  the  subjects^  and  purposes  for  which 
the  power  of  taxation  is  to  be  exercised ;  and 
to  make  for  the  first  time  (as  he  believes)  the 
distinction  that  while  the  power  of  excise  taxa- 
tion is  concurrent  in  the  Federal  and  State  gov- 
ernments over  all  subjects  of  it,  the  exercise  of 
this  power  is  as  separate  and  exclusive  in  the 
one  or  the  other  as  to  the  purposes  it  is  to  be 
exercised  for ^  as  any  other  power  with  which 
either  is  invested  under  the  Federal  Constitu- 
tion, In  brief,  the  power  of  excise  may  be 
stated  as  concurrent  as  to  subjects,  but  separate 
and  exclusive  as  ^.o  purposes. 

William  H.  Jones. 
Fort  Wayne,  Indiana, 
January  27,  1887. 


CONTENTS. 


CHAPTER  I. 

PAGE 

Introductory  Chapter      .         .  .         .        .        .         i 

Use  of  Federal  Excise  Taxes  on  Spirits  and  Tobacco  for 
Expenses  of  the  General  Civil  Administrations  in 
the  Several  States — The  Case  Stated  •        •         •         5 

CHAPTER  II. 

Present  Physical  and  Political  Conditions  of  the  United 
States  Compared  with  Those  of  1789 — Former  Easy 
Enforcement  of  State  Excise  Taxes — Obstacles  in 
the  Way  of  it  Now — Limited  Scale  of  State  Expenses 
in  1789 — Mr.  Hamilton's  Forecast  of  Aggregate  An- 
nual State  Expenses  Now  Exceeded  by  Those  of 
Many  Single  Cities — Co-equal  and  Concurrent  Powers 
of  Federal  and  State  Taxation — Nos.  XXXII., 
XXXV.  of  the  Federalist  on  These  Concurrent  Powers 
— Difference  between   Federal  and  Single  Autono- 

^    mous  States,  in  Respect  to  Excise  Taxes  .         .         .25 

CHAPTER  III. 

The  General  Civil  Administration  as  Related  to  ' '  The 
General  Welfare  of  the  United  States  " — Tendency 
towards  Heavier  State  Taxes  to  Support  It — Preser- 
vation of  the  State  Governments  as  Necessary  "In- 
strumentalities" of  "The  General  Welfare  of  the 
United  States  "—What  is  the  General  Welfare  of  the 
United  States? — Two  Distinct  Phases  of  It  in  the 
Preamble  and  Subsequent  Provisions — Parallel  be- 


xvi  Contents, 


PAGE 


tween  the  Riddle  of  ' '  The  General  "Welfare  "  and 
that  of  the  Sphinx  in  the  Greek  Mythology — The 
Difference  between  "Promoting"  and  "Providing 
for  "  the  General  Welfare — The  Despotism  of  Classes 
under  It— The  "  King  Bolt "  Which  Holds  the  Fede- 
ral Construction  Together  .....       40 

CHAPTER  IV. 

History  of  the  Exercise  of  Concurrent  Federal  and  State 
Powers  of  Excise  Taxation — Lost  Equilibrium  be- 
tween Them — Chief-Justice  Marshall's  Ruling  in 
1819  and  Subsequent  Act  of  Congress  Limit  the  State 
Power  of  Excise — Summary  of  Federal  Resources  for 
Revenue  Contrasted  with  the  Meagre  Ones  of  the 
States — The  Hands  of  the  Federal  Authority  Tied 
from  Interfering  with  Subjects  of  Exclusive  State 
Jurisdiction       ........        64 

CHAPTER  V. 

Excise  Taxes  as  Related  to  Periodical  Depressions  in 
Business — Aggregate  Annual  State  Expenses — The 
Spirits  and  Tobacco  Taxes  Sufficient  to  Defray  Them 
— Monarchy  Cheaper  than  * '  Republican  Simplicity  " 
in  Taxes  on  Property  Valuations       .         .         .         .73 

CHAPTER  VI. 

Constitutional  Compensations  for  Loss  of  State  Power  of 
Excise — The  State  Governments  as  * '  Instrumentali- 
ties" in  Respect  of  the  General  Welfare  of  the 
United  States — Groundless  Assumption  of  Antago- 
nism between  the  States  and  the  Federal  Autonomy — 
Effect  of  State  Taxes  on  Property  Valuations  on  "the 
Labor  Class  "  in  Cities — Groundless  Complacency  of 
Americans  in  Respect  to  Taxes  on  Property  Being 
Less  in  the  United  States  than  Elsewhere — Why 
These  Are  Greater  Here  than  Anywhere  Else  .         .       84 


Contents,  xvii 


CHAPTER  VII. 


PAGE 


State  Expenses  and  Distributive  Shares  of  the  Spirits 
and  Tobacco  Taxes — Absurdity  of  Separate  State 
Taxes  for  Purposes  of  the  General  Welfare,  and  Free 
Interstate  Intercourse  for  Purposes  of  the  Federal 
Autonomy — The  "  Rock  and  Vulture  "     .         .         .      io6 

CHAPTER  VIII. 

The  "  Blair  Bill"  for  Education  of  the  Illiterate— Relief 
of  the  Lettered  Poor  from  Unnecessary  State  Taxes 
as  Essential  to  the  General  Welfare  as  Education  of 
the  Illiterate — Better  Founded  in  Public  Policy — And 
Not  Obnoxious  to  the  Charge  of  Class  Legislation     .     ii8 

CHAPTER  IX. 

Aggregate  State  and  Local  Public  Indebtedness — Its 
Relation  to  the  General  Welfare — State  Debts  Not 
Materially  Lessened  during  the  Period  When  the 
Federal  Debt  Was  Being  Practically  "Wiped  Out  " — 
This  Public  Indebtedness  a  Subordinate  National 
Debt  of  the  United  States — And  its  Creation  the  Re- 
sult of  Wrong  Interpretation  of  the  Federal  Power 
of  Taxation       ....... 


125 


CHAPTER   X. 


Analysis  of  a  County  Tax-List — No  Trace  of  Excise  Taxes 
Found  on  It — Three  Classes  of  Tax- Payers — Reasons 
for  Their  Classification — Why  State  Taxes  on  Valua- 
tions are  Necessarily  Unequal — Difference  in  Numeri- 
cal Percentage  of  the  Several  Classes — Unequal  Rates 
of  Taxation  as  Shown  in  One  Township,  Illustrate 
Like  Inequalities  in  All  the  Others — Penalties  and 
Delinquencies  as  Related  to  the  Rate  of  Tax — No 
Penalty  or  Delinquency  in  the  System  of  Excise 
Taxes,  and  No  Revenue  from  Direct  Taxes  without 
Them — Proposal  to  Withhold  Protection  pf  the  Law 
from  Personal  Property  Not  Listed  for  Taxation        .     133 


xviii  Contents. 


CHAPTER   XI. 

PAGB 

Poll  Taxes— Trifling  Amount  of  These  Paid  by  the  Class 
of  Large  Property  Owners — As  Peculiar  to  the  Class 
of  Small  Property  Owners  as  Penalties  and  Delin- 
quencies .........      162 

CHAPTER   XII. 

Conclusion  upon  the  Case  Stated  in  Chapter  I. — Classi-  , 

fication  of  Subjects  and  Objects  of  Taxation     .         .     i6g 


tJNlVEBSITl 

FEDERAL  TAXES   AND 
STATE  EXPENSES. 


INTRODUCTORY   CHAPTER. 

' '  Our  remedies  oft  within  ourselves  do  lie, 
Which  we  ascribe  to  Heaven  :  the  fated  sky 
Gives  us  free  scope  ;  only,  do  backward  pull. 
Our  slow  designs  when  we  ourselves  are  dull." 

Alls  well  that  ends  well. — Shakespeare. 

Under  Federal  institutions,  the  terms  "  Po- 
lice," "Social  Order,"  and  ''Right  of  Eminent 
Domain,"  taken  together,  may  be  correctly 
defined  to  include  all  that  has  been  meant  to 
be  expressed  by  the  absurd  and  misleading 
terms, "  State  Sovereignty,"  "  Sovereignty  of  the 
States,"  *'  Reserved  Rights  of  the  States,"  etc. 

This  statement  may  startle  some,  and  awaken 
a  feeling  of  antagonism  in  others,  who  have 
not  scrutinized  the  purport  of  the  terms  and 
subjects  named.  As  to  the  police  power  in 
government,  no  pretence  of  its  existence  in  the 
federal  authority  can  be  deduced  from  the  pro- 
visions of  the  Constitution  of  the  United 
States.     As  to  social  order,  the  absence  of  the 


2      Federal  Taxes  and  State  Expenses, 

necessary  police  power  to  enforce  and  main- 
tain it,  is  no  less  conclusive  of  its  non-existence 
as  one  of  the  subjects,  or  one  of  the  attributes, 
of  federal  authority  ;  while  the  term  "  Right 
of  Eminent  Domain,"  though  commonly  em- 
ployed only  in  the  restricted  sense  of  separate 
State  power  to  devote  private  property  to 
public  uses  on  making  just  compensation  for 
it,  may  be  correctly,  as  well  as  more  largely, 
defined  to  include  every  right  and  subject  of 
legislation  not  otherwise  provided  for  in  the 
Constitution  of  the  United  States.  For  the 
recognized  right  and  powder  in  each  State  of 
the  Federal  body,  to  devote  private  property  to 
public  uses,  may  well  be  made  to  include  the 
subordinate  one  to  regulate  and  control  the 
terms  and  conditions  of  its  acquisition,  posses- 
sion, and  transfer  among  its  citizens.  For 
example  :  Purchase,  Inheritance,  Descent  and 
Distribution  of  Estates;  Execution,  Delivery, 
and  Effect  of  Deeds  and 'Conveyances  ;  Making 
and  Probate  of  Last  Wills  and  Testaments ; 
Regulation  and  Enforcement  of  Contracts  and 
Obligations ;  Creation  and  Control  of  Corpora- 
tions, both  Public  and  Private  ;  Police,  and 
Social  Order  ;  Construction  and  Maintenance  of 
Highways  and    Bridges,   Public    Buildings  for 


Federal  Taxes  and  State  Expenses,      3 

Legislative,  Executive,  and  Judicial  Purposes ; 
for  Public  Charities,  as  well  as  for  Punitive 
and  Reformatory  Purposes  Essential  to  the 
Stability  of  Social  Order — and,  in  short,  all 
the  varied  subjects  of  legislation  ordinarily 
treated  in  the  several  State  legislatures.  The 
number  of  them  is  too  great  for  special  naming 
here  ;  but  a  correct  idea  of  it  may  be  gained 
by  count  of  all  the  "  Acts  of  Assembly^''  or  of 
State  legislatures,  of  all  the  States,  and  elimina- 
ting repetitions  therefrom  ;  or,  (which  will 
amount  to  the  same  thing),  from  the  total  con- 
ception of  all  the  possible  subjects  and  rights  of 
legislation  whatsoever  in  a  sovereign  state,  de- 
duct those  named  in  the  Vlllth  Section  of  the 
First  Article  of  the  Federal  Constitution,  and 
the  balance  left  after  this  deduction  may  be 
accepted  as  the  total  sum  of  the  subjects  of 
THE  PUBLIC  GOOD,  for  which  the  several  States 
are  to  provide  by  legislation,"^  in  the  due  course 
of  the  civil  administration,  each  for  itself 
within  its  territorial  limits,  under  the  suggested 

*  While  the  several  States  are  thus  to  provide  for  the  Public 
good  by  legislation,  the  Federal  authority  is  to  provide  for  the 
"general  welfare  of  the  United  States  "  by  taxation,  and  by 
taxation  only.  When  the  student  of  federal  institutions  shall 
have  mastered  these  two  propositions,  so  as  to  fully  compre- 
hend them,  he  may  feel  himself  as  already  well  informed 
concerning  the  subject  of  his  studies. 


4    federal  Taxes  and  State  Expenses. 

Right  of  Eminent  Domain  (or  Dominion),  as  a 
substitute  for  the  less  logical,  and  more  per- 
plexing and  confusing  terms,  which  in  one 
foi^m  or  another  have  hitherto  affected  the 
quality  of  ''sovereignty,"  in  virtually  depen- 
dent and  subject  States. 

This  form  of  stating  an  old  case,  though 
obnoxious  to  the  charge  of  novelty,  may  claim 
the  merit  of  freeing  the  discussion  of  its  sub- 
jects from  the  embarrassing  use  of  terms  which, 
besides  obscuring  discussion,  tend  to  excite 
prejudices  rather  than  to  enlighten  the  judg- 
ment. Under  its  influence,  when  once  estab- 
lished among  terms  and  definitions  in  our 
political  nomenclature,  it  may  reasonably  be 
expected  that  the  substantial  difference  be- 
tween the  PUBLIC  GOOD  OF  THE  PEOPLE,  and 
the  General  Welfare  of  the  United  States  shall 
become  more  familiar  to  popular  apprehension, 
than,  (be  it  said  without  offence,)  it  has  ever 
been  to  statesmen  and  legislators.  Hitherto 
failing  to  become  popularly  known  under  the 
shadowy  disguise  of  "  State  Sovereignty,"  this 
distinction  between  The  Public  Good,  and  The 
General  Welfare  has  yet  a  possible  chance  for 
both  existence  and  recognition  under  these 
new  and  more  favorable  conditions. 


CHAPTER   I. 


Use  of  Federal  Excise  Taxes  on  Spirits  and  Tobacco  for 
Expenses  of  the  General  Civil  Administrations  in  the 
Several  States — The  Case  Stated. 


The  proposal  to  distribute  the  net  proceeds 
of  the  Federal  tax  on  production  of  all  sorts  of 
spirits  and  manufactured  tobacco  among  the 
several  States,  in  proportion  to  their  census 
population,  for  defraying  the  expenses  of  the 
general  civil  administration  under  the  several 
State  governments,  accords  with  the  principles 
of  construction  and  interpretation  of  the  Federal 
Constitution  established  by  the  Tenth  Amend- 
ment of  it. 

The  particular  provisions  of  the  Federal  Con- 
stitution relied  on  for  support  of  this  statement 
are  here  cited  for  convenient  reference  from 
subsequent  chapters,  though  the  logical  con- 
5 


6      Federal  Taxes  and  State  Expenses. 

nection  of  these  with  other  provisions  not  here 
cited  will  be  found  an  important  though  sub- 
ordinate factor  in  the  discussion  of  the  above 
proposal,  viz. : 

First.  The  Preamble  :  "  We,  the  people  of 
the  United  States,  in  order  to  form  a  more 
perfect  Union,  establish  justice,  insure  domestic 
tranquillity,  provide  for  the  common  defence, 
promote  the  general  welfare,  and  secure  the 
blessings  of  liberty  to  ourselves  and  our  pos- 
terity, do  ordain  and  establish  this  Constitution 
for  the  United  States  of  America." 

Second.  Par.  i  of  Sec.  8  of  Art.  L  :  "The 
Congress  shall  have  power  to  lay  and  collect 
taxes,  duties,  imposts,  and  excises,  to  pay  the 
debts  and  provide  for  the  common  defence  and 
general  welfare  of  the  United  States ;  but  all 
duties,  imposts,  and  excises  shall  be  uniform 
throughout  the  United  States." 

Third.  Sec.  2  of  Art.  IV.  :  "  The  citizens  of 
each  State  shall  be  entitled  to  all  privileges 
and  immunities  of  citizens  of  the  several 
States." 

Fourth.  The  Tenth  Amendment :  "  The 
powers  not  delegated  to  the  United  States  by 
the  Constitution,  nor  prohibited  by  it  to  the 


Federal  Taxes  and  Slate  Expenses.      y 

States,  are  reserved  to  the  States  respectively 
or  to  the  people." 

The  logic  of  these  several  provisions  is  that 
while  the  Tenth  Amendment  ascertains  and 
perpetuates  the  general  civil  administration 
(legislative,  executive,  and  judicial)  in  the 
several  States  exclusively  of  each  other  and  of 
the  Federal  authority,  Section  2  of  Article  IV. 
so  far  hinders  the  power  of  State  taxation  for 
support  of  it  as  to  restrict  it  in  practice  to 
polls  and  property  valuations,  while  both  pro- 
duction and  consumption  of  luxuries,  such  as 
spirits  and  manufactured  tobacco,  are  practically 
exempt  from  any  share  in  the  burden  of  State 
taxes  necessary  to  support  it ;  and  that  exercise 
of  the  concurrent  Federal  power  of  taxation 
over  these  subjects,  under  Paragraph  i  of  Sec- 
tion 8  of  Article  1.  is  the  compensation  pro- 
vided for  this  loss  of  State  power  of  excise 
taxation.  Such  seems  the  more  reasonable  con- 
struction of  these  two  provisions,  than  that  the 
several  States  should  be  charged  with  the  obli- 
.gation  of  the  general  civil  administration  by  the 
Tenth  Amendment,  and  be  limited  at  the  same 
time  by  Section  2  of  Article  IV.  to  taxes  on 
polls  and  property  valuations  for  defraying  the 


8       Federal  Taxes  and  State  Expenses, 

expenses  of  such  administration,  while  produc- 
tion and  consumption  of  the  luxuries  named 
shall  be  practically  exempt  from  any  share  in  the 
taxation  ;  for  the  Tenth  Amendment,  besides 
establishing  the  rule  for  interpreting  other  pro- 
visions of  the  Federal  Constitution,  ascertains 
and  perpetuates  the  general  civil  administration 
in  the  several  States.  This  general  civil  admin- 
istration has  not  been  "  delegated  to  the  United 
States  by  the  Constitution,  nor  prohibited  by  it 
to  the  States  "  ;  and  it  is  upon  the  maintenance 
of  it  by  taxes  as  little  burdensome,  and  yet  as 
effective  as  possible,  that  "  the  general  welfare 
of  the  United  States  "  depends.  That  this  is 
so,  is  shown  by  the  fact  that  independently  of 
the  laws  of  the  several  States  there  are  none 
for  protection  of  life  and  property,  or  for  pun- 
ishment of  offences  against  either,  or  for  main- 
taining social  order,  nor  can  be.  Without  this 
general  civil  administration  by  the  several 
States,  there  would  be  anarchy  in  the  United 
States  ;  and  "  the  general  welfare  of  the  United 
States  '*  would  be  a  practically  impossible  and 
unattainable  condition  in  the  national  exist- 
ence. "  The  general  welfare  of  the  United 
States,"  so  far  as  it  has  any  connection  with, 


Federal  Taxes  and  State  Expenses,      9 

or  dependence  upon,  the  rights  of  person  or 
property,  and  social  order  (and  it  is  hard,  if  not 
impossible,  to  have  any  notion  of  it  apart  from 
these),  has  been  so  far  committed  to  the  exclu- 
sive jurisdiction  of  the  several  State  govern- 
ments, as  that  the  Federal  authority  may  not 
touch  one  of  these  primary  and  essential  ele- 
ments of  it.  These  are  all  subjects  of  exclusive 
and  separate  State  jurisdiction,  and  the  Federal 
authority  can  exercise  no  other  rightful  power 
concerning  them  than  **  to  provide  for "  the 
expense  of  maintaining  them,  by  exercise  of  its 
powers  of  taxation. 

As  the  problem  of  Federal  taxes  "  to  provide 
for  the  general  welfare  of  the  United  States," 
is  the  main  one  to  be  considered  in  the  pro- 
posal to  use  the  Federal  taxes  on  production 
of  all  sorts  of  spirits  and  manufactured  tobacco 
for  expenses  of  the  several  State  governments, 
it  seems  deserving  of  notice  that  the  term 
"  general  welfare "  occurs  but  twice  in  the 
Federal  Constitution,  viz.,  once  in  the  Pream- 
ble, as  an  object  to  be  promoted  by  establish- 
ment of  the  Federal  Constitution  ;  and  again 
in  Paragraph  i  of  Section  8  of  Article  I.  as  an 
object  to  be  provided  for  by  Federal  taxation 


lo     Federal  Taxes  and  State  Expenses, 

under  it.  These  two  phases  of  an  identical 
national  object  are  as  distinct  as  the  means 
provided  for  them  in  the  Preamble  and  in  sub- 
sequent provisions  of  the  Federal  Constitution  ; 
and  there  can  be  no  constitutional  warrant  to 
lay  and  collect  taxes  "  to  promote  the  general 
welfare"  of  the  United  States  under  the  para- 
graph and  section  of  Article  I.,  which  does  not 
apply  with  equal  force  to  any  other  of  the  five 
distinct  national  objects  recited  in  the  Pream- 
ble ;  for  instance,  **  to  form  a  more  perfect 
union,"  etc.  This  plain  distinction  between 
the  means  "  to  promote,"  and  the  means  "  to 
provide  for,"  the  general  welfare  of  the  United 
States,  has,  however,  been  so  far  constantly 
neglected  and  turned  topsy-turvy  in  Federal 
legislation,  as  that  the  power  of  taxation  vested 
in  Congress  by  Paragraph  i  of  Section  8  of 
Article  I.  of  the  Constitution  "to  provide  for" 
the  general  welfare  of  the  United  States,  has 
been  hitherto  exclusively  exercised  "to  pro- 
mote "  it,  while  establishment  of  the  Constitu- 
tion, independently  of  the  concurrent  exercise 
of  the  power  of  taxation  under  it,  seems  to 
have  been  deemed  sufBcient  "  to  provide  for  " 
that  welfare.     That   there   should   have  been 


Federal  Taxes  aud  Stale  Expenses.     1 1 

this  persistent  exercise  of  the  Federal  power  of 
taxation  for  an  object  for  which  the  power 
"  has  not  been  delegated  to  the  United  States 
by  the  Constitution  "  (see  Tenth  Amendment), 
and  the  like  persistent  neglect  to  exercise  the 
power  for  an  object  for  which  it  has  been  so 
"delegated,"  is  an  anomaly  under  Federal  in- 
stitutions which  is  hard  to  be  accounted  for 
upon  any  recognized  principle  of  constitutional 
interpretation.  The  fact,  however,  is  indisputa- 
ble, whatever  the  causes  which  have  led  to  it, 
that  while  the  several  States  have  been  stripped 
of  productive  and  little  burdensome  sources  of 
revenue  by  the  provisions  of  the  Federal  Con- 
stitution, as  well  as  by  the  changed  conditions 
and  circumstances  of  the  country  since  the 
Constitution  was  established  in  1789,  they  have 
also  been  yet  further  restricted  in  available 
subjects  of  taxation  by  the  operation  of  causes 
wholly  beyond  separate  State  control,  until 
polls  and  property  valuations  alone  remain  to 
them  without  some  check  or  hindrance. 

With  the  single  exception  of  duties  on  im- 
ports, the  right  of  taxation  is  coequal  and  con- 
current in  the  Federal  and  State  governments ; 
but  from  the  operation  of  causes  which  will  be 


1 2     Federal  Taxes  and  State  Expenses, 

pointed  out  in  the  ensuing  chapters,  the  equi- 
librium between  these  coequal  and  concurrent 
rights  of  Federal  and  State  taxation  has  been 
so  far  lost  or  destroyed,  as  that  the  Federal 
power  to  execute  it  has  become  overwhelmingly 
great  as  compared  with  that  of  the  several 
States.  Co-operation  in  exercise  of  concurrent 
powers  of  taxation  in  the  Federal  and  State 
governments,  to  provide  for  that  general  wel- 
fare of  the  United  States,  in  which  each  has 
mutual  and  reciprocal  interest,  is  consistent 
with,  and  not  repugnant  to,  the  relations  of  the 
Federal  and  State  systems  under  the  Federal 
Constitution. 

By  co-operation  in  exercise  of  concurrent 
Federal  and  State  powers  of  taxation,  is  meant 
that  the  one  shall  collect,  and  the  other  apply 
the  proceeds  of  the  tax.  Instances  of  such  co- 
operation, in  which  the  States  collected  the 
taxes  for  use  of  the  Federal  government,  have 
been  frequent.  And  as  to  such  collection  by 
the  Federal  government  for  purposes  of  the 
general  welfare,  see  page  90  post. 

Though  the  present  purpose  concern  only 
the  application  of  the  foregoing  principles 
to  our  own  Federal  Union,  yet  is  is  deemed 


Federal  Taxes  and  State  Expenses.    1 3 

pertinent  to  submit  the  following  sugges- 
tions, to  be  kept  constantly  in  view — (to  be 
"  read  between  the  lines  ") — in  perusal  of  the 
ensuing  chapters,  viz.,  that  under  all  federal 
constitutions  having  the  equivalents  of  Section 
2  of  Article  IV.,  and  Paragraph  I  of  Section  8  of 
Article  I.  of  our  own,  direct  taxes  on  polls  and 
property  valuations,  with  exemption  from  taxes 
on  production  and  consumption  of  luxuries 
especially,  and  from  excise  taxes  generally, 
constitute  the  rule  for  State  taxes  for  support 
of  the  civil  administration,  unless  the  Paragraph 
I  of  Section  8  of  Article  I.  be  understood  to 
authorize  intervention  of  the  Federal  authority 
to  co-operate  with  that  of  the  States  in  lessen- 
ing the  burden  of  State  taxes  on  polls  and 
property  valuations,  by  resort  to  excise  taxes 
on  production  and  consumption  of  luxuries  and 
on  incomes,  and  distributing  the  net  proceeds 
of  such  taxes  among  the  several  States  accord- 
ing to  census  population.  The  absurdity  of 
giving  such  construction  to  the  provisions  of 
the  Federal  Constitution  concerning  the  power 
of  taxation  as  will  practically  restrict  that  of 
the  States  to  the  narrow  limits  of  polls  and 
property  valuations,  will  be  strikingly  apparent 


14    Federal  Taxes  and  State  Expenses, 

when  we  come  to  the  analysis  of  a  county  tax- 
list  in  a  subsequent  chapter. 

So  far,  since  establishment  of  the  Federal 
Constitution,  we  have  combined  the  principles 
of  autonomous  State  taxes  for  expenses  of  the 
general  civil  administration,  with  interchangea- 
ble and  unrestricted  rights  of  intercourse  and  citi- 
zenship for  purposes  of  the  Federal  autonomy ; 
and  while  we  have  thus  made  the  last-named 
the  strongest  possible  for  all  purposes  both  of 
offensive  and  defensive  war,  we  have  also  made 
it  the  most  burdensome  in  taxes  on  property 
for  all  other  essential  elements  of  the  general 
welfare  in  time  of  peace ;  and  the  result  has 
been  to  keep  the  States  on  the  constant  footing 
of  Wcir  taxes  for  purposes  of  the  general  civil 
administration  in  them,  while  the  Federal  au- 
tonomy, with  overwhelming  preponderance  of 
revenues,  has  only  to  pay  the  debts  and  provide 
for  the  common  defence  of  the  United  States 
in  time  of  peace. 

This  is  so  obviously  the  result  of  the  States 
undertaking  to  perform  too  many  functions 
with  limited  revenues,  and  the  Federal  govern- 
ment performing  too  few  necessary  ones  with 
very  abundant  revenues,  that  some  review  of 


Federal  Taxes  and  State  Expenses,    1 5 

the  long  train  of  circumstances,  and  successive 
changes  in  the  material  conditions  of  the 
national  existence  (see  Chap.  II.  post.),  seems 
necessary  to  account  for  it. 

The  source  of  the  absurdity  is  to  be  found 
in  the  condition  and  circumstances  of  the 
several  States,  and  their  political  relations  to 
each  other,  under  the  Articles  of  Confederation 
in  1789.  Their '*  common  defence"  was  then 
the  paramount  object  to  be  secured  ;  and  as 
the  possible  need  of  revenue  for  this  object  was 
without  limit,  so  the  national  resources  for 
providing  it  were  left  without  limit  also.  The 
"  common  defence  "  being  thus  provided  for, 
and  due  provision  for  all  else  that  could  pertain 
to  all  the  States  in  common  in  time  of  peace, 
being  no  less  essential  to  the  prosperity  of  a 
well  ordered  Federal  State,  than  its  "common 
defence  "  in  time  of  war  or  public  danger,  the 
term  "  general  welfare  of  the  United  States  " 
(a  term  then  for  the  first  time  introduced  into 
political  nomenclature)  was  resorted  to  for  ex- 
pressing something  essentially  distinct  from  the 
Public  Goody  all  subjects  of  which  were  reserved 
for  separate  State  jurisdiction ;  and  the  same 
power  of  taxation  (but  no  other  power),  was 

UNIVERSITY 


1 6    Federal  Taxes  and  State  Expenses. 

therefore  vested  in  Congress  to  provide  for  it. 
The  invention  and  use  of  this  term  as  repre- 
senting a  poHtical  force  in  the  government,  was 
essential  to  CREATE  the  federal  system ;  as, 
without  it,  the  new  system  must  draw  to  it- 
self jurisdiction  of  all  subjects  of  the  public 
good  intended  to  be  reserved  for  the  exclusive 
and  local  State  jurisdictions,  and  thereby  de- 
stroy the  federal  character  of  the  new  govern- 
ment. Failure  or  neglect  by  the  States  to 
make  such  provision  by  taxation,  for  what  was 
left  of  the  subjects  of  original  State  jurisdic- 
tion, on  renouncing  their  right  to  both  import 
and  export  duties,  and  binding  themselves,  in 
addition,  to  share  concurrently  with  the  Federal 
head  all  other  sources  of  revenue  left  to  them, 
could  hardly  have  been  less  senseless  or  ab- 
surd, than  needlessly  to  forego  the  advantages 
of  such  provision  after  having  made  it.  And 
yet  during  the  hundred  years  since  this  pro- 
vision was  made,  while  the  sources  of  separate 
State  revenue  for  purposes  of  the  public  good 
have  steadily  grown  less,  and  those  of  the 
Federal  power  have  proportionately  grown 
larger,  the  several  States  have  been  compelled 
to  take  on  themselves  the  additional  burden  of 


Federal  Taxes  dnd  State  Ey^penses.     1 7 

the  "  general  welfare  of  the  United  States/'  in 
so  far  as  the  same  is  dependent  upon,  or  in- 
volved in,  the  system  of  the  general  civil 
administration  common  to  all  the  States.  So 
complete  has  been  this  failure  or  neglect  of  the 
federal  authority  during  this  long  period,  that 
the  records  of  Federal  legislation  do  not  show- 
any  act  of  Congress  to  lay  and  collect  a  tax, 
duty,  impost,  or  excise,  objectively  to  provide 
for  the  *'  general  welfare  of  the  United  States." 
That  exercise  of  the  power  of  taxation  has 
so  far  been  exclusively  for  other  purposes  than 
those  of  the  "  general  welfare  of  the  United 
States,"  has  further  grown  out  of  the  need  for 
revenue  for  paying  the  public  debt,  and  for 
purposes  of  "  the  common  defence,"  at  the  be- 
ginning of  the  Federal  system,  while  need  of  it 
for  those  of  the  general  welfare  was  both  remote 
and  contingent.  The  several  States  had  been 
accustomed,  both  in  their  colonial  existence  and 
under  the  Articles  of  Confederation,  to  provide, 
each  for  itself  and  in  its  own  way,  for  what 
had  become  under  the  Constitution,  and  thence- 
forth has  continued  to  be,  the  essential  element 
of  the  "  general  welfare  of  the  United  States," 
(viz.,  the  system  of   the  civil  administration). 


1 8    Federal  Taxes  and  State  Expenses, 

Their  separate  legislative,  executive,  and  judi- 
cial agencies  were  then,  as  now,  in  being  ;  and 
as  the  whole  field  of  concurrent  internal  taxes 
of  all  sorts  was  open  to  them,  and  then  both 
ample  and  unrestricted,  instead  of  being,  as 
now,  practically  limited  to  polls  and  valua- 
tions, no  serious  inconvenience  could  be  felt  in 
continuing  to  lay  and  collect  separate  State 
taxes  for  expenses  of  the  several  State  systems 
of  the  civil  administration,  instead  of  resorting 
at  once  to  the  new  method  of  the  Constitution. 
The  fresh  Federal  obligation  to  serve  these  ends 
could,  and  under  the  circumstances  had  per- 
haps better,  He  perdu  until  these  separate 
State  agencies  should  be  found  inadequate  or 
defective  ;  and  until  the  new  Federal  machinery 
had  got  to  working  smoothly  in  all  its  compli- 
cated parts,  and  had  paid  the  public  debt 
which  was  clamoring  for  all  the  money  the 
new  government  could  spare  beyond  what  was 
needed  for  necessary  living  expenses.  And  so 
both  individual  citizens  and  separate  States 
hoped  on — (neither  of  them  perhaps  yet  re- 
alizing the  nature  and  extent  of  the  Federal 
obligation  to  provide  for  the  "  general  welfare 
of  the  United  States  ** ;  or,  in  fact,  what  this 


Federal  Taxes  and  State  Expenses,    1 9 

new  term  in  their  political  institutions  stood 
for) — and  struggled  on  under  constantly  in- 
creasing difficulties  and  debts,  occasioned  by- 
Indian  wars  and  annuities,  the  whiskey  insur- 
rection, French  spoliations,  the  suppression  of 
Algerine  piracy,  Louisiana  and  Florida  pur- 
chases, the  war  of  18 12,  and  the  numberless 
other  constant  demands  on  the  Federal  treas- 
ury ;  until  finally — (in  Jackson's  administration) 
— the  last  dollar  of  public  indebtedness  was 
paid,  and  no  financial  excuse  was  left  for 
longer  delay  by  Congress,  to  enter  on  the  dis- 
charge of  its  constitutional  obligations  to  pro- 
vide for  the  "  general  welfare  of  the  United 
States." 

By  this  time,  however,  there  had  arisen,  as 
it  were,  "  a  new  king  over  Egypt  which  knew 
not  Joseph."  The  long-continued  practice  of 
separate  State  provision  for  both  the  public 
good  AND  **  the  general  welfare,"  originating, 
as  we  have  seen,  in  the  financial  needs  of  the 
Federal  power  in  the  beginning  of  its  existence, 
(and  possibly  supplemented  by  lack  of  experi- 
ence as  to  the  nature  and  extent  of  the  Federal 
obligation  to  provide  for  the  "  general  welfare 
of  the   United  States"),  and  continued  from 


20    Federal  Taxes  and  State  Expenses, 

supposed  rather  than  solid  reasons  of  public 
necessity,  had  now  acquired  the  force  of  con- 
stitutional habit.  Both  popular  sentiment  and 
political  party  opinion  had  concurred  to  pro- 
duce the  conviction  that  the  then  existing 
condition  of  things  should  be  permanent.  It 
was  generally  thought  no  less  than  "  treason  to 
sovereign  State  rights  "  for  Congress  to  make' 
any  provision  by  taxation,  (the  only  lawful 
means  in  its  power,)  to  provide  for  the  "  gen- 
eral welfare  of  the  United  States  " — as  if  any 
other  means  existed,  or  could  exist,  by  which 
the  rights  of  the  several  States  and  the  public 
good  of  their  people  could  be  preserved  and 
perpetuated  in  equal  safety  and  prosperity  in 
all  of  them.  These  rights  of  the  States,  and 
this  public  good  of  their  people,  cannot  be 
either  safe  or  equally  prosperous  in  all  the 
States,  under  constantly  increasing  burdens  of 
necessary  State  taxes,  and  constantly  diminish- 
ing sources  of  separate  State  revenue,  without 
the  intervention  of  Federal  taxes  to  equalize 
them.  Nothing  else  could  be  needed  to  secure 
this  equilibrium  of  safety  and  prosperity  in 
all  the  States  ;  and  accordingly  nothing  else 
but   the   power  to  produce  it   by  taxation   is 


Federal  Taxes  and  State  Expenses,    2 1 

vested  in  the  Federal  authority  by  the  Constitu- 
tion. The  refusal  of  this  constitutional  obli- 
gation, under  these  conditions,  was  equivalent 
to  denial  of  its  existence.  Like  the  twelve 
half-baptized  "  brethren,"  whom  St.  Paul  found 
at  Ephesus,  public  men,  both  of  that  day  and 
continually  since,  seem  not  to  "  have  so  much 
as  heard  whether  there  be  any  .  .  ."  (such  pro- 
vision). There  were  then  no  debts  of  the 
United  States,  though  many  and  crushing  ones 
in  some  of  the  States,  all  of  them  incurred 
mainly  for  proper  purposes  of  "  the  general 
welfare  of  the  United  States,"  in  addition  to 
such  as  were  compelled,  under  the  "  sovereign  '* 
State  obligation  to  provide  for  the  public  good 
within  respective  State  limits,  in  the  course  of 
separate  State  administration.  Little  or  noth- 
ing was  needed  for  purposes  of  "  the  common 
defence  "  ;  for  we  had  grown  out  of  the  weak- 
ness of  infancy  into  the  sturdy  strength  of 
manhood,  and  were  at  peace  among  ourselves 
and  with  the  rest  of  the  world.  The  Federal 
revenues  were  overflowing  the  treasury ;  but 
the  "  new  king  over  Egypt,"  having  forgotten 
or  ignored  his  obligation  to  Joseph,  could  think 
of  nothing  better   to  be  done  with  "  the  sur- 


2  2    Federal  Taxes  and  State  Expenses, 

plus"  than  to  'distribute"  it — yes,  these  are 
the  terms — among  the  Egyptians,  instead  of 
avoiding  its  accumulation  by  making  due  pro- 
vision for  the  necessary  living  expenses  of 
Joseph's  children.  And  so  it  has  continued 
to  this  day  ;  with  only  the  deplorable  difference 
that  both  the  surplus  and  the  distributions 
have  steadily  grown  larger — Joseph's  children 
meanwhile  starving  and  in  bondage,  while  the 
Egyptians  are  eating  their  fill  out  of  the  flesh- 
pots  from  which  the  children  have  been 
excluded. 

The  term  "  general  welfare  of  the  United 
States "  was  a  stranger  in  political  nomencla- 
ture at  the  time  of  its  introduction  and  use  in 
the  Constitution.  It  had,  perhaps,  a  vague 
popular  meaning,  as  implying  something  benefi- 
cent in  connection  with  exercise  of  unlimited 
power  of  taxation  (for  it  is  only  in  connection 
with  exercise  of  this  power  by  Congress  that 
the  "  general  welfare  of  the  United  States  "  is 
mentioned  in  the  Constitution) ;  but  this  was 
all  that  could  then  be  understood  to  be  ex- 
pressed by  use  of  the  term.  It  had  no  legal 
meaning  beyond  this  vague  signification  ;  for 
under  the  antecedent  separate  State  care  of  all 


Federal  Taxes  and  State  Expenses,    23 

subjects  of  the  public  good,  there  had  been 
neither  need  nor  occasion  for  exact  legal  or 
technical  definition  of  the  term.  In  this  respect 
the  term  presents  an  exception  to  the  precision 
and  accuracy  everywhere  else  prevalent  in  the 
terms  and  phraseology  of  the  Federal  Con- 
stitution. For  example,  such  terms  as  ''  habeas 
corpus,"  "  bill  of  attainder,"  *'  letters  of  marque 
and  reprisal,"  **  suits  in  law  and  equity,"  etc., 
indicating  subjects  of  either  positive  or  nega- 
tive jurisdiction,  had,  each  of  them,  a  definite 
legal  import.  So,  too,  terms  indicating  qualities 
as  distinct  from  subjects  of  jurisdiction,  such, 
for  example,  as  "  law  impairing  the  obligation 
of  contracts,"  "  ex  post  facto  law,"  etc. ;  these, 
and  every  other  term  used  in  the  Constitution, 
either  to  denote  a  subject  or  a  quality  of  juris- 
diction, except  this  one,  had  an  antecedent  and 
technical  legal  meanings  and  are  deemed  to 
have  the  same  incorporated  with  themselves. 
This  is,  as  it  were,  novus  homo — the  new  man — 
supposed  to  have  been  born  of  the  people,  but 
known  to  have  been  born  of  the  exigencies  of  the 
times  as  well ;  but,  however  born,  there  had 
not  hitherto  been  either  name  or  place  for  him 
in  either  Constitution  or  laws.     On  account  of 


24    Federal  Taxes  and  State  Expenses, 

close  kin  it  would  not  do  to  call  him  by  the  old 
patrician  name  of  **  public  good,"  for  only  the 
sum  of  all  subjects^  both  of  Federal  and  separate 
State  jurisdiction,  could  be  properly  so  called  ; 
and  "  general  welfare,"  though  of  close  kin  with 
public  good,  is  neither  identical,  equivalent,  nor 
synonymous  with  it.  Further  than  this,  it  can 
only  be  affirmed  with  certainty  that  this  new 
factor  in  government  was  to  be  a  beneficent  one, 
as  in  compensation  for  the  unlimited  power  of 
taxation  severally  and  equally  relinquished  by 
the  States,  and  as  therefore  affecting  them  all 
equally  and  alike,  both  in  its  burdens  and  in  its 
blessings,  and  its  characteristic  and  appropriate 
legend  is  JUSTICE  TO  ALL,  FAVORS  TO  NONE. 
To  all  which  the  general  civil  administration, 
under  separate  and  exclusive  State  authority 
over  all  subjects  of  it,  more  exactly  and  more 
closely  than  any  thing  else,  corresponds. 


CHAPTER  II. 

Present  Physical  and  Political  Conditions  of  the  United  States 
Compared  with  Those  of  1789 — Former  Easy  Enforcement 
of  State  Excise  Taxes — Obstacles  in  the  Way  of  it  Now — 
Limited  Scale  of  State  Expenses  in  1789 — Mr.  Hamilton's 
Forecast  of  Aggregate  Annual  State  Expenses  Now  Ex- 
ceeded by  Those  of  Many  Single  Cities — Co-equal  and 
Concurrent  Powers  of  Federal  and  State  Taxation — Nos. 
XXXII.,  XXXV.  of  the  Federalist  on  these  Concurrent 
Powers — Difference  between  Federal  and  Single  Autono- 
mous States,  in  Respect  to  Excise  Taxes. 

The  reader  is  reminded  that  when  the  Con- 
stitution was  estabhshed  in  1789,  the  United 
States  comprised  but  a  trifling  extent  of  terri- 
tory as  compared  with  that  embraced  within 
present  Hmits.  Their  extent  was  but  as  a  fringe 
along  the  Atlantic  coast  from  New  Hampshire 
to  Georgia  inclusive,  nowhere  more  than  three 
hundred  miles  wide  between  the  sea-coast  and 
the  Alleghany  Mountains.  Even  between  the 
States  nearest  each  other  in  this  narrow  com- 
pass, intercourse  of  all  sorts,  and  especially  that 
for  trade  and  interchange  of  products,  was  both 
tedious  and  hazardous,  and  was  almost  wholly 
25 


26     Federal  Taxes  and  State  Expenses, 

made  by  sea-voyages.  There  was  neither 
steamboat,  nor  canal,  nor  railroad,  nor  tele- 
graph in  existence ;  and,  with  hardly  an  excep- 
tion, river  navigation  did  not  extend  beyond 
the  limits  of  a  single  State.  Lands  and  polls 
were  the  principal  subjects  of  taxation  for  State 
purposes,  and  the  highly  productive  and  little 
burdensome  subjects  of  excise  taxation,  which 
make  the  chief  sources  of  revenue  for  expenses 
of  the  civil  administration  the  world  over  to- 
day, had  not  then  been  developed.  Such  per- 
sonal property  as  then  existed  was,  for  the  most 
part,  as  plainly  visible  and  as  easily  found  and 
listed  for  taxation  under  State  tax  laws,  as 
lands  and  polls.  There  were  no  public  funds  in 
which  good  investments  could  be  made,  and  in 
fact  there  was  little  or  no  money  for  such  in- 
vestment if  opportunity  for  making  it  had  ex- 
isted. Investments  of  money  in  government 
securities,  even  in  Europe,  was  then  of  but  re- 
cent existence,  and  was  practically  unknown  in 
the  United  States.  There  were  no  such  public 
funds  as  our  national,  State,  and  municipal 
bonded  debts,  or  securities  of  private  corpora- 
tions, in  which  capital  accumulated  in  one  State 
could  find  investment  in  another  and  avoid  taxa- 


Federal  Taxes  and  State  Expenses,      27 

tion  at  home.  There  were  no  railroad,  insur- 
ance, manufacturing,  mining,  telegraph,  and  the 
like  incorporated  stock  companies,  to  absorb 
the  capital  produced  by  the  common  industry 
of  the  several  States,  and  shelter  it  from  taxes 
for  State  and  local  purposes.  In  fact,  such 
taxes  as  were  laid  on  personal  property  were, 
as  a  rule,  specific  rather  than  depending  on 
valuation ;  as  so  much  per  head  on  horses 
and  cattle  on  the  farms,  or  on  carriages,  or 
on  licenses  for  designated  occupations.  There 
were  no  manufactures  in  the  sense  in  which 
this  term  is  used  to-day ;  and  the  business  of 
the  country  was  carried  on  by  single  individu- 
als, or  by  partnerships  composed  of  these. 
There  were  no  general  laws  of  incorporation, 
and  special  charters  were  to  be  obtained  from 
some  State  legislature  before  associations  of 
men  and  capital,  with  special  franchises  in  desig- 
nated business  pursuits,  could  be  formed ;  and 
it  was  therefore  impossible  for  hundreds  of  mil- 
lions of  dollars  in  personal  property  to  be  accu- 
mulated in  single  hands  through  the  agency  of 
private  corporations,  as  at  present.  The  legal 
fiction  that  "corporations  have  no  souls  and 
never  die  "  had  not  then  so  far  usurped  control 


28     Federal  Taxes  and  State  Expenses, 

of  the  public  conscience,  or  that  of  individuals, 
as  to  induce  general  belief  that  it  was  com- 
mendable business  sagacity  to  evade  payment 
of  State  and  local  taxes  by  investments  in  the 
stock  and  securities  of  private  corporations  out- 
side the  State  jurisdiction.  It  has  been  reserved 
for  more  recent  times  to  witness  the  success  of 
schemes  of  this  sort.  Such  a  thing  as  share 
capital  in  private  corporations  created  by  the 
laws  of  one  State,  and  owned  by  citizens  of  an- 
other State,  and  carrying  on  business  in  yet  an- 
other, or  in  most,  if  not  in  all  the  other  States, 
was  wholly  unknown.  These  forms  now  repre- 
sent the  larger  share  of  the  aggregate  personal 
property  in  the  several  States.  As  a  rule, 
everybody  knew  about  what  property  his  neigh- 
bor owned,  and  could  tell  pretty  nearly  how 
much  he  ought  to  pay  taxes  on ;  and  the  dif- 
ferent species  of  property  were  so  few  as  com- 
pared with  the  almost  infinite  variety  of  them 
at  present,  that  there  was  little  difficulty  in 
finding  out  what  personal  property  any  single 
individual  owned,  and  in  listing  it  for  taxation. 
Under  these  conditions,  whoever  might  be 
tempted  to  conceal  part  of  his  taxable  property, 
in  order  to  avoid  being  taxed  on  it,  was  in  dan- 


Federal  Taxes  and  State  Expenses,     29 

ger  of  losing  caste  with  his  neighbors  if  he 
yielded  to  the  temptation,  and  this  was  some 
safeguard  against  such  evasion. 

Added  to  all  this,  the  scale  of  expenses  for 
State  and  local  purposes  was  extremely  limited 
as  compared  with  that  everywhere  prevailing 
to-day.  The  average  citizen  of  1789  knew 
nothing  of  either  the  needs  or  of  the  facilities 
which  now  exist  for  State  and  local  indebted- 
ness beyond  the  means  for  immediate  payment. 
When  the  question  of  establishing  the  Federal 
Constitution  was  being  considered  by  the  peo- 
ple of  the  several  States,  and  objection  was 
made  to  the  great  preponderance  of  the  Federal 
power  of  taxation  under  it  over  that  of  the 
States,  the  objection  was  answered  by  Alex- 
ander Hamilton  to  the  effect  that  the  neces- 
sary aggregate  expenses  of  all  the  State  gov- 
ernments could  not,  "  for  many  years  to  come," 
exceed  a  million  dollars  a  year  for  all  purposes. 
This  was  doubtless  a  reasonable  conjecture  for 
the  time  it  was  made  for,  as  well  as  for  the 
modest  scale  of  State  expenses  then  in  vogue  ; 
but  we  know  that  for  the  year  1880  the  census 
report  shows  a  total  aggregate  tax  on  property 
valuations  alone  for  all  State  and  local   pur- 


30     Federal  Taxes  and  State  Expenses, 

poses,  of  $313,000,000  in  round  numbers,  exclu- 
sive of  poll,  specific,  and  other  forms  of  taxa- 
tion under  State  tax  laws.  The  expenses  of 
many  single  cities  now  exceed  Mr.  Hamilton's 
estimate  for  the  whole  country.  Those  of  New 
York  exceed  it  thirty  times  over  every  year. 

But  it  is  beyond  the  present  purpose  to  at- 
tempt a  complete  detail  of  the  causes  which 
have  led  to  the  wide  difference  in  results  be- 
tween the  well-grounded  conjecture  of  the  most 
sagacious  of  American  statesmen  in  1789  and 
the  actual  condition  of  things  to-day  in  the 
United  States,  in  respect  to  the  working  of  the 
system  of  co-equal  and  concurrent  Federal  and 
State  powers  of  taxation,  then  for  the  first 
time  introduced  in  practice,  either  in  the 
United  States  or  elsewhere  in  the  world.  The 
immense  additions  of  territory  which  have 
since  extended  the  United  States  of  1789  from 
ocean  to  ocean,  though  the  most  obvious,  have 
not  been  the  most  influential  cause  which  has 
produced  the  marvellous  change  in  the  condition 
and  circumstances  of  the  several  States,  as  well 
as  of  their  people,  since  Mr.  Hamilton's  con- 
jecture of  annual  aggregate  State  expenses  was 
made. 


Federal  Taxes  and  State  Expenses,     3 1 

Since  1789  the  fabric  of  civil  society  has  been 
so  far  gradually  modified  as  that  but  little  of 
what  was  then  regarded  as  the  maximum  of 
comfort  in  the  living  of  the  people  and  of  con- 
venience in  the  public  and  civil  administration 
remains  so  to-day.  The  systems  of  business 
and  the  arts  of  life  have  given  way  to  new  ones. 
Forms  and  elements  of  property,  unknown  in 
1789,  constitute  the  great  mass  of  wealth  in 
many  of  the  States  to-day,  while  in  others  but 
little  change  in  this  respect  is  noticeable  in  the 
census  statistics.  It  seems  probable  that  this 
disproportion  in  relative  progress  in  wealth  of 
different  States,  having  identical  guaranties  of 
personal  liberty  and  of  religious  freedom  under 
the  Federal  Constitution,  is  the  result  of  un- 
equal Federal  taxation  on  account  of  "  the 
general  welfare  of  the  United  States."  That 
the  States  in  which  exercise  of  this  power  has 
been  directly  felt  have  advanced  more  rapidly 
than  those  in  which  such  exercise  has  been 
only  incidentally  felt,  would  seem  to  mark  it  as 
the  cause  of  the  difference  between  them  in 
material  prosperity. 

If  we  take  historical  facts  rather  than  "  tra- 
ditional intentions  "  of  the  framers  of  the  Fed- 


32      Federal  Taxes  and  State  Expenses. 

eral  Constitution  for  our  guide  in  interpreting 
its  provisions  concerning  the  power  of  taxation, 
there  seems  to  be  no  ground  for  reasonable 
doubt  that  these  provisions  were  framed  on  the 
theory  that,  inasmuch  as  the  power  to  lay  and 
collect  duties  on  imports  was  exclusive  in  the 
Federal  government,  and  withal  peculiarly 
fitted  for  exercise  of  its  national  functions,  this 
source  would  be  the  primary  one  of  that  gov- 
ernment both  from  choice  and  convenience; 
while  the  whole  field  of  internal  taxation,  both 
direct  and  excise,  which  seemed  equally  adapted 
for  exercise  of  the  reserved  powers  and  func- 
tions of  the  several  State  governments,  would 
always  be  open  to  these  for  State  and  local 
expenses  of  the  general  civil  administration  in 
them,  subject  to  no  other  restriction  or  inter- 
vention than  that  of  the  concurrent  right  of  the 
Federal  authority  to  enter  it  at  any  time  for 
supplying  deficiencies  in  its  duties  from  imports, 
from  such  subjects  or  sources  of  revenue  as  had 
not  been  appropriated  by  the  States  for  State  and 
local  uses.  For  this  reason,  it  was  at  one  time 
proposed  to  limit  the  Federal  power  of  taxa- 
tion to  duties  on  imports,  and  to  make  the 
power  of  taxation  otherwise  exclusive  in  the 


Federal  Taxes  a7id  State  Expenses.      33 

several  State  governments ;  but  for  the  reasons 
stated  in  Nos.  XXXII.  and  XXXV.  of  the 
Federalist,  the  power  of  taxation  was  made 
concurrent  in  the  Federal  and  State  govern- 
ments, except  as  to  duties  on  imports,  which 
was  made  exclusive  in  the  former.  But  we 
have  learned,  from  nearly  a  hundred  years  of 
costly  experience,  that  the  most  productive,  as 
also  the  least  burdensome,  sources  of  public 
revenue,  which  were  supposed  to  be  perpetual 
subjects  of  these  concurrent  powers  of  Federal 
and  separate  State  taxation,  have  become  as 
practically  exclusive  in  the  Federal  govern- 
ment as  if  made  so  by  constitutional  provision  ; 
and  that  the  production  of  all  sorts  of  spirits 
and  manufactured  tobacco  is  among  the  num- 
ber of  them. 

These  subjects  as  they  exist  to-day  were 
practically  unknown  a  hundred  years  ago. 
There  was  but  the  germ  of  present  production 
of  either  then  in  existence,  and  difficult  and 
costly  means  of  transportation  so  effectually 
limited  production  to  the  local  demands  for 
consumption,  as  that  State  excise  taxes  on  pro- 
duction of  them  might  then  be  made  a  source 
of  revenue  for  expenses  of  the  civil  adminis- 


34     Federal  Taxes  and  Slate  Expenses, 

tration  under  separate  State  authority.  The 
restraint  put  upon  such  State  excise  on  produc- 
tion by  Section  2  of  Article  IV.  of  the  Federal 
Constitution  could  not  then  be  felt  ;  and  the  dif- 
ficulties in  the  way  of  transportation  of  the 
products  named  made  them  readily  subject  to 
State  excise  tax  laws.  But  this  condition  of 
things  has  been  so  far  changed  by  increased 
facilities  for  transportation  of  commodities,  by 
improved  processes  of  manufacture,  as  well  as 
by  the  multiplied  means  of  instantaneous  com- 
munication between  most  widely  separated 
points  of  production  and  consumption,  facili- 
tated as  these  are  by  the  provisions  of  Section  2 
of  Article  IV.,  that  consumption  of  the  luxuries 
named  is  no  longer  restricted  to  the  neighbor- 
hood of  production,  but  is  as  widespread  as  the 
limits  of  the  United  States,  and  more  cheaply 
supplied  from  any  given  point  of  production  to 
its  most  widely  separated  parts,  than  was  possible 
in  contiguous  States  at  the  time  the  Constitu- 
tion was  established.  Instead  of  transportation 
being  now,  as  it  was  in  1789,  the  main  item 
affecting  the  cost  of  consumption  of  these  prod- 
ucts, that  of  their  constituent  elements  has 
come  to  be  the  main  one  ;  and  the  place  of 


Federal  Taxes  and  State  Expenses,     35 

production  is  governed  accordingly.  Instead 
of  many  small  establishments  in  each  of  the 
several  States,  capable  of  supplying  the  local 
demands  of  its  people  for  consumption,  each  of 
them  easily  subjected  to  a  State  excise  tax  on 
its  production,  as  was  the  state  of  things  then 
in  vogue,  these  small  establishments  have  been 
replaced  by  a  smaller  number  of  large  ones  in  a 
few  States,  in  which  the  agricultural  products 
needed  as  constituent  elements  can  be  procured 
in  greatest  abundance  and  at  least  cost.  The 
product  of  these  few  large  establishments, 
while  sufficient  for  the  demand  for  consumption 
in  all  the  States,  is  governed  by  the  price  for 
which  it  may  be  sold  at  home,  or  in  other 
States,  or  abroad,  when  not  ruled  both  as  to 
price  and  amount  of  production  by  combina- 
tions among  the  producers,  and  is  entitled  to 
be  sold  in  any  State,  under  the  provisions  of  Sec- 
tion 2  of  Article  IV.  of  the  Federal  Constitu- 
tion, upon  the  same  conditions  as  to  State  taxes, 
as  if  produced  in  that  State.  Either  argument 
or  discussion  seems  out  of  place  to  show  that 
under  such  conditions  a  State  tax  on  produc- 
tion of  the  luxuries  named  could  produce 
revenue  only  in  the  States  in  which  the  busi- 


36     Federal  Taxes  and  State  Expenses, 

ness  of  making  them  is  carried  on,  and  in 
these  only  so  long  as  some  other  State  either 
imposed  no  tax  or  a  less  one  on  production. 

If  it  be  urged  that  the  difficulty  in  the  way 
of  separate  State  revenue  from  the  products  of 
distilleries,  breweries,  and  tobacco  factories  in 
the  several  States,  may  be  obviated  by  laying 
the  tax  on  consumption  rather  than  on  produc- 
tion, the  answer  is  that  while  collection  of  the 
tax  on  production  is  relatively  inexpensive  and 
easy  of  enforcement,  the  tax  on  sales  has  been 
shown  by  experience  to  be  so  difficult  and  bur- 
densome as  not  to  justify  the  expenses  of  col- 
lection. It  has  been  owing  perhaps  as  much  to 
these  causes,  as  to  the  impediments  put  in  the 
way  by  Section  2  of  Article  IV.  of  the  Federal 
Constitution,  that  State  excise  taxes  generally 
have  fallen  into  desuetude.  The  enforcement  of 
such  a  tax  on  consumption  of  spirits  and  manu- 
factured tobacco,  in  many  of  the  States,  would 
require  in  each  a  number  of  tax  collectors  as 
great  perhaps  as  that  now  employed  to  collect 
the  Federal  internal-revenue  taxes  on  produc- 
tion of  these  articles.  It  has  therefore  been 
thought  more  eligible  and  effective,  as  well  as 
more  conducive  to  "  the  general  welfare  of  the 


Federal  Taxes  and  State  Expenses,     3  7 

United  States,"  that  the  Federal  authority  shall 
exercise  its  concurrent  power  of  taxation  over 
production  of  the  articles  named,  in  co-opera- 
tion with  that  of  the  several  States,  for  lessen- 
ing existing  burdens  of  State  taxes  on  polls  and 
property  valuations  for  support  of  the  general 
civil  administration  under  separate  State  au- 
thority, subject  only  to  such  exigencies  in 
other  affairs  as  shall  compel  recourse  to  all  its 
available  resources  for  revenue. 

If  political  problems  were  susceptible  of  dem- 
onstration like  mathematical  ones,  according  to 
the  measure  of  abstract  truth  they  contain,  it 
might  be  demonstrated  that  concurrent  powers 
of  taxation  in  the  Federal  and  State  govern- 
ments have  given  to  the  former  practically  ex- 
clusive control  of  taxes  on  incomes  as  well  as 
of  taxes  on  spirits  and  manufactured-tobacco 
production,  and  that  these  three  subjects  of  ex- 
cise taxes  are  of  greater  value,  as  sources  of 
revenue,  than  all  others  taken  together  which 
have  been  left  to  the  States  for  expenses  of  the 
general  civil  administration.  Certain  it  is  that 
added  to  the  exclusive  right  to  collect  duties  on 
imports,  they  give  to  the  Federal  authority  such 
overwhelming  preponderance  in  practical  taxa- 


38     Federal  Taxes  and  State  Expenses, 

tion  as  must  have  been  anticipated  and  pro- 
vided for  by  limiting  its  exercise  to  the  three 
objects  specified  in  Paragraph  i  of  Section  8,  of 
Article  I.  of  the  Federal  Constitution,  viz. :  "  to 
pay  the  debts  and  provide  for  the  common  de- 
fence and  general  welfare  of  the  United  States." 
These  terms  do  not  limit  exercise  of  the  Federal 
power  to  such  as  it  possesses  concurrently  with 
the  States ;  and  the  only  question  which  can 
properly  arise  out  of  them  in  respect  to  the  pro- 
posed exercise  of  it,  is  as  to  whether  the  main- 
tenance of  the  civil  administration  under  the 
several  State  governments,  by  taxes  least  bur- 
densome to  the  people  of  the  several  States,  be 
involved  in  "  the  general  welfare  of  the  United 
States?  "  Nor  should  it  be  overlooked,  in  the 
answer  to  this  question,  that  while  the  Tenth 
Amendment  perpetuates  the  exclusive  jurisdic- 
tion of  the  several  States  over  the  subjects  of 
the  general  civil  administration  in  each,  these 
terms  lay  the  Federal  authority  under  obligation 
to  provide  for  the  expenses  of  it,  by  taxes  of 
some  sort,  to  the  extent  of  its  connection  with 
"  the  general  welfare  of  the  United  States." 

It  may  be  pertinent  to  remark  in  closing  this 
chapter,  that  under  autonomous  or  non-federal 


Federal  Taxes  and  Slate  Expenses,     39 

governments,  where  the  whole  power  of  taxa- 
tion is  exercised  by  a  single  legislative  body, 
as  in  England  or  France,  the  expenses  of  the 
civil  administration  which  corresponds  with 
that  of  the  several  State  governments  under 
our  Federal  system,  are  paid  out  of  taxes  on 
production,  or  else  out  of  government  monop- 
oly of  the  production  of  spirits  and  manufac- 
tured tobacco,  while  license  fees  for  retail  traffic 
in  these  products  largely  suffice  for  the  expen- 
ses of  cities  and  incorporated  towns.  The  rev- 
enues from  these  productions  in  England,  and 
from  the  government  monopoly  of  tobacco  in 
France,  more  than  suffice  for  expenses  of  the 
civil  administration  which  corresponds  with 
that  of  our  own  several  State  expenses :  and 
this,  notwithstanding  the  expenses  of  the  civil 
administration  in  each  of  the  countries  named 
are  modelled  after  the  tastes  of  royal  extrava- 
gance, while  our  greater  expenses  are  profess- 
edly based  on  those  of  "  republican  simplicity." 


CHAPTER  III. 

The  General  Civil  Administration  as  Related  to  ' '  The  Gen- 
eral Welfare  of  the  United  States" — Tendency  towards 
Heavier  State  Taxes  to  Support  It— Preservation  of  the 
State  Governments  as  Necessary  "Instrumentalities"  of 
"  The  General  Welfare  of  the  United  States  " — What  is 
the  General  Welfare  of  the  United  States? — Two  Distinct 
Phases  of  It  in  the  Preamble  and  Subsequent  Provisions — 
Parallel  between  the  Riddle  of  "  The  General  Welfare  " 
and  that  of  The  Sphinx  in  the  Greek  Mythology — The 
Difference  between  "Promoting"  and  "Providing  for" 
the  General  Welfare — The  Despotism  of  Classes  under 
It— The  "King  Bolt"  Which  Holds  the  Federal  Con- 
struction Together. 

The  Federal  and  State  governments  have  mu- 
tual and  reciprocal  interests  in  "  the  general  wel- 
fare of  the  United  States,"  under  the  Federal 
Constitution  :  the  first-named,  while  having  ex- 
clusive authority,  under  Paragraph  i,  of  Section 
8  of  Article  I.,  and  the  Tenth  Amendment,  taken 
together,  to  collect  taxes,  duties,  imposts,  and 
excises  "  to  provide  for  the  general  welfare 
of  the  United  States,"  is  prohibited  by  the  last- 
named  of  these  provisions  from  otherwise  in- 
terfering with  any  subject  of  it ;  and  the  sev- 
40 


Federal  Taxes  and  State  Expenses.     41 

eral  States,  while  having  exclusive  jurisdiction 
of  all  such  subjects  of  "  the  general  welfare  of 
the  United  States  "  not  prohibited  to  them  by 
the  Federal  Constitution,  are  prohibited  by  the 
Tenth  Amendment  from  laying  and  collecting 
taxes  of  any  kind  to  provide  for  it.  For,  jurisdic- 
tion of  the  subjects  of  "  the  general  welfare  of 
the  United  States,"  not  having  been  delegated 
to  the  United  States  by  the  Constitution,  nor 
prohibited  by  it  to  the  States,  remains  in  the 
latter,  by  virtue  of  the  Tenth  Amendment ; 
and  among  the  subjects  of  "the  general  wel- 
fare of  the  United  States "  which  are  thus 
made  exclusive  ones  of  State  jurisdiction,  the 
rights  of  person  and  property,  the  regulation  of 
the  domestic  relations,  and  the  maintenance  of 
social  order  may  be  named  as  both  conspicu- 
ous and  essential  elements  of  the  general  wel- 
fare of  the  United  States,  as  also  of  exclusive 
State  jurisdiction  ;  and  if  these  subjects  be  in 
any  way  part  of,  or  identified  with,  "  the  gen- 
eral welfare  of  the  United  States,"  then  is  the 
power  to  lay  and  collect  taxes  to  provide  for 
the  due  administration  of  them  in  the  general 
civil  administration,  an  exclusive  one  in  the 
Federal  autonomy  ;  and  the  States  are  concur- 


42     Federal  Taxes  and  State  Expenses, 

rently  restricted  to  the  levy  and  collection  of 
taxes  only  for  such  purposes  as  are  local  and 
peculiar  to  each  of  the  States. 

But  this  concurrent  right  of  taxation  in  the 
Federal  and  State  governments  is  so  far 
checked  by  the  provisions  of  Section  2,  of  Arti- 
cle IV.,  as  that  no  State  may  discriminate  in 
taxes  for  local  and  peculiar  purposes,  between  its 
own  citizens  or  their  property,  and  the  citizens  of 
other  States  and  their  property  within  its  juris- 
diction ;  and  we  need  only  recur  to  the  uni- 
form current  of  decisions  of  the  Supreme  Court 
of  the  United  States,  in  cases  affecting  the  right 
of  State  taxation  since  18 19,  to  show  that  the 
field  of  State  excise  taxes  has  been  steadily 
restricted,  until  the  subjects  of  it  have  disap- 
peared from  the  tax  lists  of  most  of  the  States, 
and  taxes  for  support  of  the  general  civil  ad- 
ministration under  separate  State  authority, 
may  be  said  to  be  practically  limited  to  polls 
and  property  valuations.  While  this  restraint 
upon  the  State  power  of  excise  is  wholly  con- 
sistent with  the  obligation  of  the  Federal  au- 
tonomy to  provide  for  expenses  of  the  general 
civil  administration  as  essential  to  the  "  general 
welfare  of  the  United  States,"  it  means  also 


federal  Taxes  and  State  Expenses,     43 

heaviest  taxes,  both  as  to  polls  and  property 
valuations,  on  those  least  able  to  pay  them,  so 
long  as  the  States  shall  persist  in  taxing  them 
for  purposes  of  the  general  civil  administration, 
instead  of  demanding  of  the  Federal  autonomy 
the  performance  of  its  constitutional  obliga- 
tions in  this  respect,  as  essential  to  "  the  gen- 
eral welfare  of  the  United  States."  While  the 
resources  of  the  Several  states  for  revenue  to 
provide  for  that  part  of  the  general  welfare  of 
the  United  States  which  is  inseparable  from 
separate  State  administration,  have  thus 
steadily  grown  less,  the  need  for  larger  State 
expenses  becomes  more  and  more  imperative, 
on  account  of  the  troubles  which  from  time  to 
time  menace  the  stability  of  social  order  and 
the  safety  of  both  persons  and  property.'  It  is 
thus  for  lack  of  effective  exercise  of  the  power 
of  excise  taxation  by  the  Federal  autonomy 
alone,  that  "  the  general  welfare  of  the  United 
States  "  is  seriously  menaced,  and  the  means 
for  maintaining  it  through  instrumentality  of 
the  several  State  governments  lessened  in  pro- 
portion to  the  steadily  growing  need  for  them. 
Until  within  a  few  years  there  had  been  no 
serious  need  for  increased  State  taxes  on  polls 

JL^,     Of  THE       ^r 
I^NIVERSITY 


44     Federal  Taxes  and  State  Expenses. 

and  property  valuations  in  any  of  the  States,  to 
meet  increased  expenses  for  maintaining  social 
order,  as  well  as  to  compensate  owners  for  loss 
or  damage  to  property  by  mob  violence.  The 
riots  in  Pittsburgh  and  Alleghany,  some  ten 
years  ago,  may  be  said  to  have  inaugurated  a 
new  era  in  this  respect.  Property  to  the  value 
of  many  million  dollars  having  been  destroyed 
by  the  mob,  the  compensation  for  it  was  to  be 
made  by  increased  taxes  on  what  was  left ;  and 
in  this,  as  in  all  cases  of  direct  taxes  on  polls 
and  property  valuations,  the  increased  tax  fell 
on  those  innocent  of  participation  in  the  out- 
rage, as  well  as  those  least  able  to  bear  it,  in  the 
proportion  of  about  seventy-three  to  twenty- 
seven.  This  statement  of  the  relative  ratio  in 
taxes  paid  for  damages  done  by  the  mob  in  the 
case  referred  to,  is  based  upon  the  assumption 
that  the  same  ratio  between  small  and  large 
property  owners  exists  in  Pittsburgh  and  Alle- 
ghany as  is  shown  in  the  analysis  of  a  tax  list 
to  exist  in  one  of  the  counties  in  the  State  of 
Indiana  (see/^j/..  Chapter  X.)  Since  the  riot 
in  Pittsburgh  and  Alleghany,  like  cases  have 
been  multiplied  in  other  cities  in  Ohio,  Indiana, 
Illinois,  Missouri,  Wisconsin,  and  Texas,  which 


Federal  Taxes  and  State  Expenses,     45 

are  yet  fresh  in  recollection,  and  which  must 
call  for  repetition  of  the  same  unequal  ratio  of 
taxes  between  small  and  large  property  owners, 
to  make  compensation  for  loss  of  property,  or 
the  expenses  of  State  militia.  These  cases  are 
referred  to  in  this  place,  to  show  the  increased 
necessity  for  additional  sources  for  State  reve- 
nues, if  the  State  governments  are  to  maintain 
their  original  sphere  of  usefulness  under  Federal 
institutions,  as  the  sole  conservators  of  the 
rights  of  person  and  property  and  of  social 
order. 

The  tendency  towards  heavier  State  taxes 
on  polls  and  property  valuations  for  support 
of  the  civil  administration  in  the  several  States, 
may  be  said  to  be  the  most  serious  menace 
against  the  usefulness  of  the  State  govern- 
ments under  the  Federal  system.  The  con- 
stantly recurring  agitations  and  disturbances 
which  from  time  to  time  require  the  armed 
intervention  of  State  authority,  must  inevitably 
lead  to  the  armed  intervention  of  the  Federal 
authority  as  a  substitute  for  it,  on  account  of 
the  high  rate  of  State  taxes  necessary  to  pay 
military  expenses,  as  well  as  damages  from 
mob  violence.     If  we  would  preserve  the  use- 


46     Federal  Taxes  and  State  Expenses, 

fulness  of  the  State  governments  as  instrumen- 
talities of  the  general  civil  administration,  some 
way  must  be  found  by  which  they  shall  have 
access  to  sources  and  subjects  of  revenue  not 
now  available  to  them  under  concurrent  pow- 
ers of  Federal  and  State  taxation.  Federal 
taxation  of  the  production  of  spirits  and  manu- 
factured tobacco,  and  per  capita  distribution 
of  the  nett  proceeds  of  the  tax  among  State 
populations,  according  to  census  population, 
seems  to  promise  the  requisite  safeguard  to 
the  usefulness  and  perpetuity  of  the  State 
governments.  If  such  tax  be  inadequate  to 
the  necessary  end,  the  like  tax  on  incomes, 
and  like  distribution  of  its  proceeds,  could 
not  fail  to  accomplish  such  results,  and  at  the 
same  time  do  away  with  existing  needs  for 
State  taxes  on  polls  and  property  valuations. 
What  then  is  "  the  general  welfare  of  the 
United  States  "  ?  The  author  has  sought  but 
has  not  been  able  to  find  a  satisfactory  defini- 
tion of  this  term  in  any  of  the  books  of  writers 
on  constitutional  or  public  law,  in  the  opinions 
of  judges  of  courts  either  Federal  or  State,  or  in 
the  speeches  or  public  addresses  of  statesmen 
and  learned  professors,  or  in  the  compilations  of 


Federal  Taxes  and  State  Expenses,     47 

lexicographers.  And  yet  if  such  a  thing  exist, 
there  must  be  in  it  some  quaUty  by  which  it 
may  be  distinguished  from  every  thing  else.  If 
the  framers  of  the  Federal  Constitution  knew 
what  '*  the  general  welfare  of  the  United  States" 
was  or  is  made  up  of,  or  consisted  in,  they  did 
not  tell  us,  but  seem  to  have  left  it  undetermined, 
as  a  sort  of  variable  quantity  which  was  to 
be  ascertained  from  time  to  time  by  successive 
generations,  according  to  the  changed  conditions 
and  circumstances  in  which  they  should  find 
themselves.  By  this  they  left  the  way  open 
to  all  the  benefits  and  advantages  to  be  gained 
from  the  lessons  of  political  experience,  in- 
stead baring  it,  as  under  the  Chinese  constitu- 
tion, and  thus  arresting  progress  in  civilization 
by  their  posterity,  who  dare  not  go  beyond  the 
experience  of  their  ancestors.  Instead  of  this, 
they  seem  to  have  purposely  left  the  constituent 
elements  of  "  the  general  welfare  of  the  United 
States,"  for  which  Congress  was  to  provide  by 
taxation,  to  be  determined  from  time  to  time 
by  those  most  deeply  interested  in  them  ;  tak- 
ing care  only  to  establish  the  formula  by  which 
these  were  to  be  provided  for  by  taxation.  They 
as  little  foresaw  the  impending  physical  and 


48     Federal  Taxes  and  State  Expenses, 

political  changes  in  the  conditions  of  the  na- 
tional existence,  which  in  the  course  of  a  hun- 
dred years  was  to  destroy  the  State  power  of 
excise  taxation,  as  the  barons  of  England  fore- 
saw that  the  principles  of  the  great  charter  ex- 
torted by  them  from  an  unwilling  king,  would 
in  progress  of  time  subject  their  own  posterity 
to  the  dominion  of  the  popular  will.  There  is 
in  the  provisions  of  the  Federal  Constitution 
respecting  taxation  "  to  provide  for  the  general 
welfare  of  the  United  States,"  the  same  quality 
of  adaptation  to  changed  conditions  and  cir- 
cumstances of  the  people  which  has  made  "the 
great  charter"  of  our  forefathers  the  ever  varia- 
ble quality  in  government  that  makes  it  conform 
to  the  general  welfare  of  the  people  under  the 
changing  conditions  of  a  progressive  civilization. 
The  riddle  of  "  the  general  welfare  "  as  pro- 
pounded in  the  Preamble  and  provisions  of  the 
Federal  Constitution,  seems  to  afford  a  parallel 
to  that  of  the  Sphinx  in  the  Greek  mythology. 
This  classic  fable  is  generally  accepted  as  repre- 
senting some  evil  in  government,  for  which  the 
only  hope  of  remedy  is  to  be  found  in  profiting 
from  experience  of  its  bad  results.  The  sphinx 
in  the  fable  is  represented  as  a  monster  both 


Federal  Taxes  aud  State  Expenses.     49 

wise  and  cruel,  enabled  by  her  wisdom  to  pro- 
pound deep  mysteries,  and  prompted  by  her 
cruelty  to  devour  such  as  suffered  from  them 
but  were  unable  to  explain  the  cause  of  their 
sufferings,  until  eventually  one  of  these  found 
out  and  exposed  the  trick  of  the  fable,  and 
thenceforth  the  trouble  was  over. 

Now,  if  some  one  of  our  statesmen  will  take 
on  him  the  task  to  distinguish  the  two  general 
welfares  respectively  named  in  the  Preamble  to 
the  Federal  Constitution,  and  subsequent  pro- 
visions of  it,  by  setting  such  mark  on  each  as 
that  neither  shall  thenceforth  be  liable  to  be 
confounded  with  or  mistaken  for  the  other,  he 
may  probably,  by  so  doing,  render  as  great  ser- 
vice to  the  mass  of  his  countrymen,  as  was  ren- 
dered to  the  Greeks  by  the  man  who  solved  the 
riddle  of  the  sphinx,  and  thereby  freed  his 
country  from  her  hurtful  presence.  The  author 
does  not  take  this  task  on  himself ;  for  being 
neither  statesman  nor  politician,  his  work  on  the 
task,  though  never  so  well  done,  would  hardly 
be  accepted  as  satisfactory  until  some  one  else, 
with  juster  claims  to  public  confidence  as  an 
expert  in  constitutional  interpretation,  should 
approve  it.     And  as  this  constitutional  expert, 


50     Federal  Taxes  and  State  Expenses, 

according  to  the  usage  in  such  case,  is  to  have 
the  credit  of  the  performance,  it  seems  but  fair 
that  he  shall  do  at  least  part  of  the  work  it  re- 
quires. However,  while  thus  modestly  declin- 
ing the  whole  task,  the  following  suggestions 
are  volunteered,  viz. : 

First.  The  term  "  general  welfare  "  in  the 
Preamble  to  the  Federal  Constitution  is  dis- 
tinguishable from  that  in  Paragraph  i  of  Sec- 
tion 8  of  Article  I.,  as  an  object  to  be  pro- 
moted by  establishment  of  the  Constitution, 
whereas  that  used  in  the  paragraph  and  section 
named  is  an  object  to  be  provided  for  by  taxes 
under  it. 

Second.  There  is  no  power  granted  to  the 
United  States  in  the  Constitution  to  lay  and 
collect  taxes  of  any  sort  to  promote  any  things 
either  "  the  general  welfare,"  or  "  the  general  wel- 
fare of  the  United  States"  ;  but  only  to  provide 
for  the  three  national  objects  set  out  in  Para- 
graph I  of  Section  8  of  Article  I.,  viz. :  "  to 
pay  the  debts  and  provide  for  the  common  de- 
fence and  general  welfare  of  the  United  States." 

Third.  "  To  promote  the  general  welfare  " 
is  one  of  the  purposes  accomplished  by  perpetual 
establishment  of  the  Federal  Constitution,  while 


Federal  Taxes  and  State  Expenses,     5 1 

"  to  provide  for  the  general  welfare  of  the 
United  States  "  is  one  of  the  three  specified 
national  objects  for  which  ''  taxes,  duties,  im- 
posts, and  excises  "  may  be  laid  and  collected 
under  its  provisions. 

Fourth.  Only  that  which  is  common  alike 
to  all  the  States  is  to  be  '*  provided  for  "  by 
Federal  taxation  ;  while  that  which  is  not  thus 
common  to  all  the  States,  but  is  local  and  pe- 
culiar to  some  of  them,  may  be  **  promoted,"  or 
"provided  for,"  by  separate  State  authority,  at 
discretion  ;  and  to  this  end  the  several  States 
have  coequal  and  concurrent  rights  and  powers 
of  taxation  with  the  Federal  authority  under 
the  Constitution,  except  as  to  duties  on  imports. 

These  suggestions  of  essential  elements  seem 
to  justify  the  following  definition  of  the  term, 
viz. : 

The  "  general  welfare  of  the  United  States," 
is  the  state  or  condition  of  safety  and  prosper- 
ity, in  which  citizens  of  the  United  States  have 
and  enjoy  their  rights  of  person  and  property, 
and  the  stability  of  social  order,  in  the  civil 
administration  common  to  all  the  States,  under 
separate  and  exclusive  State  jurisdiction  over 
all  the  subjects  of  it. 


52    Federal  Taxes  and  State  Expenses, 

This  definition  is  intended  to  include  in  the 
civil  administration  of  the  several  States,  every 
subject  and  power,  which  is  original  and  in- 
herent in  "  free,  sovereign,  and  independent 
States  " — (see  the  Declaration  of  Independence, 
and  the  subsequent  treaty  of  acknowledg- 
ment of  this  Declaration  by  Great  Britain  in 
1783,  as  to  what  these  subjects  and  powers 
are — )  ;  except  as  is  otherwise  provided  in  the 
Constitution  of  the  United  States.  It  will 
enable  the  reader  to  mark  the  material  dif- 
ference between  the  '*  general  welfare  of  the 
United  States  "  which  Congress  is  '^  to  provide 
for  "  by  laying  and  collecting  '*  taxes,  duties, 
imposts,  and  excises,"  and  THE  PUBLIC  GOOD  ; 
(identical  with  the  pro  bono  publico  of  the 
Romans ;  from  whom  the  term  has  been  de- 
rived, to  modern  governments  having  but  a 
single  legislative  body ; )  which  is  to  be  cared 
for  by  the  several  States,  each  for  itself 
within  its  own  territorial  limits.  The  States 
separately  care  for  and  guard  all  subjects  of  the 
Public  good,  by  exercise  of  inherent  "  sovereign  " 
powers  ;  while  the  Federal  authority  is  to 
provide  for  the  general  welfare,  by  exercise 
of  the  single,  delegated,  and  derived  power  of 


Federal  Taxes  and  State  Expenses,    53 

taxation  only.  Beyond  this  the  latter  has  no 
right  to  go  in  respect  of  the  general  welfare ; 
for  though  its  rights  and  powers  in  this,  as  in 
all  other  respects,  be,  like  its  laws,  supreme, 
they  are  not  "  sovereign  **  in  the  technical 
sense  in  which  the  rights  and  powers  of  the 
several  States  are  so.  In  this  technical  sense 
what  are  called  "  sovereign "  rights  of  the 
several  States,  are  original  and  inherent  ;  not 
secondary  and  derived  ;  while  the  rights  and 
powers  of  the  Federal  authority  in  respect  of 
the  general  welfare,  are  wholly  secondary  and 
derived ;  and  though  its  acts  therein  be  "  su- 
preme," they  are  not  "  sovereign  "  in  the  sense 
in  which  the  rights  and  powers  of  the  States 
are  so. 

The  supremacy  of  Federal  laws  is  limited  to 
the  subjects  enumerated  in  the  Federal  Con- 
stitution :  such,  for  example,  as  the  right  to 
coin  money  ;  fix  the  standard  of  weights 
and  measures ;  declare  war  and  make  treaties, 
etc. ;  while  the  right  of  eminent  domain  re- 
mains  in    the  several   States. 

And  yet  the  several  States  are  not  "  sovereign 
States,"  either  in  their  relations  to  the  Federal 
government,   or   to    each   other,   or    to    other 


54    Federal  Taxes  and  State  Expenses, 

governments.  For  what  a  travesty  both  upon 
the  idea  of  sovereignty  and  of  common  sense, 
would  be  the  suggestion  of  a  "  sovereign 
State,"  without  either  capacity  or  power  to 
declare  war,  to  make  treaties,  to  form  alliances, 
to  raise  armies  and  provide  fleets,  or  to  coin 
money,  or  lay  and  collect  duties  upon  the 
foreign  commerce  entering  its  own  ports,  to 
pay  for  all  these  things  ?  The  chief  of  a  bar- 
barous tribe,  in  his  paint  and  feathers,  may 
claim  all  these  things,  and  have  his  claim 
allowed ;  but  not  so  one  of  the  States  united 
under  the  Federal  Constitution,  may  claim  any 
one  of  these  things,  and  have  its  claim  allowed. 
The  inherency  of  sovte  of  the  rights  of 
sovereignty,  viz.  the  inherent  right  to  guard 
and  provide  by  legislation  for  all  subjects  of 
the  Public  good  within  its  territorial  limits  is 
the  true  and  more  creditable  characterization 
of  what  is  intended  to  be  expressed  in  the 
term  ** State  sovereignty,"  or  ''sovereignty  of 
the  States " ;  and  because  these  last-named 
terms  have  proved  misleading,  and  are  sub- 
versive of  the  idea  intended  to  be  expressed  by 
them,  it  were  better  that  they  be  henceforth 
allowed  to  fall  into  disuse. 


Federal  Taxes  and  State  Expenses,    55 

The  subjects  of  the  Public  good  differ  so 
much  in  widely  separated  States,  that  to  have 
invested  the  Federal  authority  with  power  to 
provide  for  them  in  any  direct  way,  must  in  the 
end  have  led  to  exercise  of  "  sovereign  "  power 
over  all  the  subjects  of  it.  It  was  to  avoid  this 
hazard  that  only  that  which  is  common  to  all  the 
States^  is  intrusted  by  the  Constitution  to  be 
provided  for  by  Federal  taxation.  For  ex- 
ample :  the  civil  administration  common  to  all 
the  States,  and  embracing  all  the  varied  sub- 
jects of  the  Public  good,  may  be  thus  provided 
for,  as  being  both  essential  and  indispensable  to 
the  "general  welfare  of  the  United  States"; 
while  all  the  subjects  of  this  civil  administra- 
tion are  exclusive  ones  of  separate  State  power. 
It  is  THE  SYSTEM  of  this  civil  administration  as 
distinct  from  the  subjects  of  it,  that  is  to  be 
provided  for  by  the  special,  but  unlimited 
power  of  Federal  taxation.  The  very  nature 
of  this  special  power  of  Federal  taxation  fixes 
both  the  purpose  and  the  character  of  it. 

Exercise  of  federal  power  over  the  subjects 
of  the  Public  good,  is  incompatible  with  the 
nature  of  federal  institutions.  The  two  can- 
not perpetually  co-exist ;  but  the  special  power 


56    Federal  Taxes  and  State  Expenses, 

of  federal  taxation  to  provide  for  the  general 
welfare  under  them,  through  agency  of  the 
several  State  systems  of  the  civil  administra- 
tion, exercising  '*  sovereign  "  powers  over  all 
the  subjects  of  the  Public  good,  IS  THE  ESSEN- 
TIAL CONDITION  OF  THEIR  PERPETUITY. 

From  the  establishment  of  the  Federal  Con- 
stitution to  the  present  time,  the  provisions  of 
it  for  legislation  concerning  '^  the  general  wel- 
fare of  the  United  States  "  seem  to  have  been 
more  in  the  nature  of  hindrances  in  the  way  of 
action  on  the  subject,  than  helps  and  guides  to 
it.  Apparently  confounding  "  the  general  wel- 
fare "  named  in  the  Preamble  as  an  object  to  be 
promoted  by  establishment  of  the  Constitution, 
with  that  "  general  welfare  of  the  United 
States  "  named  in  Paragraph  i  of  Section  8  of 
Article  I.,  as  an  object  to  be  provided  for  by 
taxes,  duties,  imposts,  and  excises,  political  par- 
ties have  been  formed  on  the  basis  of  particular 
classes  whose  immediate  interests  have  been 
substituted  for  "  the  general  welfare  of  the 
United  States,"  under  the  pretence  (perhaps  we 
should  say  under  the  delusion)  that  this  general 
welfare   could   be  best  "  promoted  "  by  such 


Federal  Taxes  and  State  Expenses,    5  7 

exercise  of  the  Federal  power  of  taxation  as 
would  so  place  these  classes  in  the  sphere  of  its 
operation,  as  that  direct  benefits  and  profits 
should  enure  to  them,  whatever  else  might  en- 
ure to  all  others.  Aside  from  the  fact  that  this 
class  system  of  Federal  taxes  is  plainly  selfish, 
as  contrasted  with  that  which  would  provide 
for  the  common  good  of  all  the  national  in- 
terests without  distinction  among  them,  it  is 
not  true  that  Congress  is  authorized  to  lay  and 
collect  taxes  "  to  promote  "  any  class  interest 
whatever.  Such  encouragement  of  class  or 
local  interests  falls  within  the  exclusive  tax 
jurisdiction  of  the  several  States ;  thus  making 
**  the  tariff  a  local  question  ";  though  in  a  sense 
especially  different  from  that  expressed  both 
by  Mr.  Greeley  and  General  Hancock  when  can- 
didates for  the  Presidency. 

All  that  Congress  may  rightfully  do  by 
exercise  of  its  powers  of  taxation  is  "  to  pro- 
vide for"  the  three  specified  objects  named  in 
Paragraph  i  of  Section  8  of  Article  I.  of  the 
Constitution.  It  may  pass  votes  of  commenda- 
tion and  like  encouragements  of  particular  or 
even  of  personal  interest,  and  in  this  way  "  pro- 


58  Federal  Taxes  and  State  Expenses. 

mote  "  or  "  encourage  "  them  to  the  extent  of 
congressional  influence  when  exerted  in  such 
form  ;  but  there  is  no  warrant  to  be  found  in 
the  Constitution  for  it  to  vote  either  taxes  or 
money  for  such  purpose.  Anybody  may  "  pro- 
mote "  or  "  encourage  "  the  welfare  of  another 
by  the  like  acts  of  kindness  and  good-will ;  but 
nothing  short  of  money  or  its  equivalent  can 
"  provide  for "  that  welfare.  A  citizen  may 
promote  the  general  welfare  of  his  family  by 
good  example  and  by  civility  in  his  intercourse 
with  others,  but  he  cannot  "  provide  for  "  that 
welfare  by  these  means  only.  The  folly  which 
seeks  "  to  provide  for  "  the  general  welfare  of 
everybody  by  favors  to  particular  individuals  is 
practised  only  in  Federal  legislation,  and  is,  in 
practical  politics,  as  if  the  reflected  light  of  the 
moon  were  substituted  for  the  direct  light  and 
warmth  of  the  sun  in  the  natural  world. 

It  is  this  Federal  legislation,  which  reverses 
the  constitutional  rule  of  taxation  and  aims  "  to 
provide  for  "  the  welfare  of  the  whole  by  laying 
taxes  to  promote  the  interests  of  particular 
classes,  that  has  practically  secured  exemption 
from  State  and  local  taxes  of  a  larger  share  of 
the  national  wealth  than  is  left  subject  to  such 


Federal  Taxes  and  State  Expenses.  59 

taxes,  while  the  small  properties  of  toiling  mil- 
lions have  become  the  mainstay  and  resource 
for  support  both  of  the  general  civil  adminis- 
tration under  the  several  State  governments, 
and  of  the  most  essential  elements  in  "  the  gen- 
eral welfare  of  the  United  States."  The  placing 
of  property  in  the  public  debt  of  the  United 
States  beyond  the  reach  of  State  taxation  for 
any  purpose  whatever,  and  the  exemption  of 
incomes  from  State  taxes  on  account  of  the  in- 
ability of  the  State  power  of  taxation  to  reach 
them,  plainly  show  this;  while  State  tax-lists 
in  all  the  States,  so  far  as  opportunity  exists  for 
examination  of  their  details,  concur  in  showing 
that  it  is  the  aggregate  direct  taxes  on  property 
valuations  of  less  than  $5,000  each,  that  yield 
three  fourths  of  the  aggregate  revenue  paid  for 
support  of  the  several  State  governments.  Such 
is  the  result,  attested  by  uniform  experience,  of 
the  despotism  of  classes  under  Federal  forms, 
so  shaping  Federal  legislation  through  combina- 
tions of  particular  interests,  that  these  rather 
than  "  the  general  welfare  of  the  United  States  " 
shall  receive  the  immediate  care  and  favor  of 
legislation,  while  the  great  mass  of  the  national 
interests,  not  represented  or  having  any  share 


6o   Federal  Taxes  and  State  Expenses, 

in  the  combination,  is  left  to  such  incidental 
or  reflected  hurt  or  benefit  as  may  chance  to 
fall  to  it.  It  is  in  this  way  that  while  political 
parties  have  been  mainly  occupied  in  groundless 
wrangles  as  to  whether  this  or  that  form  of 
duties  on  imports  would  promote  or  hinder 
"  the  general  welfare  of  the  United  States,"  the 
question  of  how  best  "  to  provide  for "  this 
welfare  has  scarcely  received  attention,  except 
to  be  left  as  the  foot-ball  of  party  games,  in 
which  the  spoils  of  office  are  the  prize,  and  per- 
petual vassalage  of  the  great  body  of  tax-payers 
the  object,  of  class  combinations,  which  enjoy 
the  substantial  fruits  of  party  successes,  no  mat- 
ter which  party  triumphs. 

The  term,  "  despotism  of  classes  "  under  Fed- 
eral forms,  has  not  been  lightly  or  inconsider- 
ately used,  but  with  reference  to  its  true  mean- 
ing as  applied  to  the  civil  affairs  of  government. 
Despotism  means  government  without  regard 
to  constitutional  obligations,  and  may  be  prac- 
tised by  one  or  by  many  less  than  the  whole 
number  in  a  State  towards  the  others,  but  it 
can  never  be  practised  by  the  majority  upon 
themselves;  and  herein  is  the  strong  bulwark 
both  of  popular  liberty  and  of  the  general  wel- 


Federal  Taxes  and  State  Expenses.  6 1 

fare  of  the  people  under  Federal  forms,  when — 
(but  only  when) — each  and  every  class  interest 
shall  be  subordinated  to  the  general  welfare  of 
the  whole  people,  by  all  interests  being  placed 
alike  on  the  footing  of  equality  before  the  law. 
Without  this  there  can  be  neither  stability  for 
free  institutions  nor  assurance  of  equal  and  just 
taxation  under  Federal  forms. 

As  in  the  English  language  it  is  the  little  words, 
serving  the  use  of  conjunctions  and  preposi- 
tions, which  tie  the  several  parts  of  a  sentence 
together  and  impart  strength  and  harmony  to 
its  several  parts,  so  in  the  Federal  Constitution, 
it  is  the  short  and  seemingly  insignificant  Sec- 
tion 2,  of  Article  IV.  which  serves  to  tie  all 
parts  of  the  Federal  system  together.  This  is 
the  bond  of  union  between  the  several  States 
without  which  there  could  be  no  union  worth 
having.  Speaking  as  a  mechanic,  it  is  "the 
king  bolt,"  which  holds  the  Federal  construc- 
tion together  as  a  whole  ;  and  it  was  to  pre- 
serve this  indispensable  bond  of  the  Federal 
union  of  the  several  States,  rather  than  to  put 
down  slavery,  that  the  war  against  secession 
was  prosecuted  to  a  successful  issue  by  the 
Federal  authority.     This  short  section  of  but 


6  2    Federal  Taxes  and  State  Expenses. 

three  lines  surrenders  to  the  Federal  autonomy 
the  sovereign  State  right  of  discriminating  be- 
tween its  own  citizens  and  those  of  other 
States,  and  secures  to  those  of  any  State  in 
all  the  others,  not  only  the  hospitality  due  to 
friends  and  favorites,  but  that  equality  of  rights 
in  trade  and  privileges  of  citizenship  which  is 
esteemed  the  most  cherished  mark  of  power  in  a 
State  to  grant  or  to  deny :  and  in  doing  this,  it 
broke  down  the  State  power  of  excise  taxation 
in  all  its  essentials,  except  that  of  bare  right. 
And  as  if  to  insure  the  complete  dependence  of 
the  States  on  the  Federal  power  to  provide  for 
*'  the  common  defence  and  general  welfare  "  of 
all  the  States,  the  latter  are  prohibited  by  an- 
other provision  of  the  Constitution  from  laying 
export  duties  without  consent  of  Congress. 
It  has  been  at  this  great  price  that  the  existing 
freedom  of  intercourse  among  citizens  of  the 
several  States  of  the  Union  has  been  bought. 
But  for  this  short  section  in  the  Federal  Con- 
stitution, there  would  be  to-day  State  custom- 
house and  passport  systems  similar  to  those 
which  annoy  and  obstruct  freedom  of  inter- 
course among  the  several  states  of  Continental 
Europe;    and  as  compensation  for  which  the 


Federal  Taxes  and  State  Expejises.    63 

Federal  authority  has  incurred  the  obligation 
**  to  lay  and  collect  taxes,  duties,  imposts,  and 
excises,  to  pay  the  debts  and  provide  for  the 
common  defence  and  general  welfare  of  the 
United  States,"  subject  to  no  other  condition 
or  restriction,  than  that  taxes  on  lands  and 
polls  shall  be  laid  according  to  representation 
in  the  House  of  Representatives,  and  that 
duties,  imposts,  and  excises  shall  be  laid  by 
the  rule  of  uniformity,  without  regard  to  local- 
ity of  production  or  place  of  consumption. 


CHAPTER  IV. 

History  of  the  Exercise  of  Concurrent  Federal  and  State 
Powers  of  Excise  Taxation — Lost  Equilibrium  between 
Them — Chief-Justice  Marshall's  Ruling  in  1819  and 
Subsequent  Act  of  Congress  Limit  the  State  Power  of  Ex- 
cise— Summary  of  Federal  Resources  for  Revenue  Con- 
trasted with  the  Meagre  Ones  of  the  States — The  Hands 
of  the  Federal  Authority  Tied  from  Interfering  with  Sub- 
jects of  Exclusive  State  Jurisdiction. 

If  we  trace  the  history  of  the  exercise  of  con- 
current powers  of  taxation  in  the  Federal  and 
State  governments  from  its  beginning  to  pres- 
ent results,  we  shall  find : 

First.  That  besides  destroying  the  State 
power  to  lay  and  collect  excise  taxes  on  pro- 
duction and  consumption  of  such  luxuries  as 
spirits  and  manufactured  tobacco,  it  has  so 
crippled  that  of  taxing  incomes,  as  to  greatly 
impair  its  value  as  a  source  of  revenue  for  State 
and  local  purposes,  while  an  act  of  Congress 
has  exempted  property  in  the  public  debt  of 
the  United  States  from  taxes  for  any  State  or 
local  purposes  whatever  ;  and 
64 


Federal  Taxes  and  State  Expenses,  65 

Second.  That  other  State  excise  taxation 
has  been  impaired,  except  on  the  impracticable 
condition  of  uniform  State  excise  tax-laws. 

This  decay  of  separate  State  excise  taxation, 
though  gradual,  has  become  so  nearly  complete 
that  while  this  source  of  revenue  has  entirely 
disappeared  from  the  tax  lists  of  most  of  the 
States,  the  few  in  which  it  yet  lingers  find  its 
enforcement  attended  with  so  much  difficulty 
as  hardly  to  be  worth  longer  retention.  Though 
in  theory  co-equal  as  well  as  concurrent  in  the 
beginning  of  the  Federal  system,  the  character 
of  co-equality  in  constitutional  right  has  been 
lost  for  lack  of  co-equal  power  to  assert  itself. 
From  an  assumed  antagonism  between  the 
Federal  and  State  governments,  (an  assump- 
tion not  only  not  warranted  by  historical  facts, 
but  in  palpable  contradiction  both  of  these,  and 
of  the  theory  of  co-equal  and  concurrent  con- 
stitutional rights  of  taxation,)  which  would 
avail  itself  both  of  pretext  and  of  opportunity 
on  the  part  of  the  several  States,  to  destroy  the 
Federal  autonomy,  the  Supreme  Court  of  the 
United  States  in  the  time  of  Chief-Justice  Mar- 
shall (18 19)  gave  judgment  (in  the  case  of 
McCuUoch   vs,   Maryland,  4th    Wheaton)    to 


66  Federal  Taxes  and  State  Expenses, 

the  effect  that  the  States  might  not  tax  the 
"  instrumentaHties  "  which  the  Federal  govern- 
ment deemed  proper  to  estabUsh  for  carrying 
out  its  purposes ;  lest  if  allowed  to  tax  them 
at  all,  they  might  tax  them  out  of  existence. 
The  particular  "  instrumentality  "  involved  in 
the  case  before  the  court  in  which  this  judg- 
ment was  given,  was  the  Bank  of  the  United 
States,  in  which  the  United  States  was  a  stock- 
holder, and  which  claimed  and  obtained  by  this 
"  act  of  judicial  legislation,"  entire  exemption 
and  immunity  from  all  State  taxes ;  and  from 
the  date  of  this  judgment,  all  property  in  the 
public  debt  of  the  United  States  has  been  held 
exempt  from  State  taxes,  either  by  virtue  of 
the  principles  on  which  the  judgment  rests,  or 
else  by  subsequent  act  of  Congress  to  the  same 
effect.  This  intrusion  by  both  the  judicial  and 
the  legislative  departments  of  the  Federal  au- 
tonomy upon  the  co-equal  right  of  the  several 
States  to  lay  and  collect  taxes  on  property  in 
the  national  debt  owned  by  their  own  citizens, 
is  an  anomaly  which  exists  nowhere  else  ;  and 
the  Federal  government  of  the  United  States 
is  the  only  one  in  the  world  under  which  prop- 
erty in  the  public  debt,  owned  by  its  citizens,  is 


Federal  Taxes  and  State  Expenses,   67 

wholly  exempt  from  taxes  for  support  of  the 
general  civil  administration. 

This  important  limitation  upon  the  State 
power  of  excise  taxation,  both  by  the  judg- 
ment of  the  Supreme  Court  and  by  act  of  Con- 
gress, is  referred  to  in  this  connection  for  the 
purpose  of  showing  the  necessity  created  by  it 
for  intervention  of  the  Federal  authority  to 
supply  the  deficiency  in  State  revenues  occa- 
sioned by  it.  It  is  not  the  present  purpose  to 
question  the  validity  of  the  judgment,  or  the 
correctness  of  the  principles  on  which  the 
judgment  rests.  Since  that  judgment  was  pro- 
nounced, it  is  to  be  accepted  as  part  of  '*  the 
supreme  law  of  the  land,"  and  the  principles 
on  which  it  rests  as  practically  part  of  the  Fed- 
eral Constitution,  as  if  made  so  by  formal 
amendment  of  it  for  limiting  the  State  power 
of  excise  taxation. 

Such  exemption  of  a  particular  class  of  prop- 
erty owners  from  State  taxes  to  which  all  others 
are  subject,  while  the  exempted  class  possesses, 
relatively  with  all  others,  a  greater  share  of 
wealth,  and  are  therefore  better  able  than 
many  others  to  pay  taxes  for  support  of  the 
civil  administration,  is  peculiar  to  the  American 


68    Federal  Taxes  and  State  Expenses. 

system  of  taxation  for  support  of  the  general 
civil  administration  under  Federal  forms.  Ex- 
emption from  State  taxes  by  judicial  construc- 
tion on  the  one  hand,  and  by  Federal  legis- 
lative misapprehension  of  constitutional  provi- 
sions on  the  other,  have  together  placed  more 
personal  property  beyond  the  reach  of  separate 
State  power  of  taxation,  than  remains  subject 
to  it.  Under  no  other  form  of  government  is 
property  in  the  national  bank  and  in  the  pub- 
lic debt,  owned  by  its  own  citizens,  exempted 
from  taxes  for  support  of  the  general  civil  ad- 
ministration ;  and  that  such  exemption  exists 
in  the  United  States,  is  the  result  of  changes  in 
constitutional  provisions  by  judicial  interpreta- 
tion, and  the  want  of  regard  for  constitutional 
compensations,  in  Federal  legislation. 

With  exclusive  right  to  lay  and  collect  duties 
on  imports,  joined  to  practical  monopoly  of 
internal  excise  taxes  on  production  and  con- 
sumption of  luxuries  and  on  incomes,  and  hav- 
ing all  its  "  instrumentalities,"  and  property  in 
the  public  debt,  representing  at  one  time  sev- 
eral billions  of  dollars,  exempted  from  State 
taxes,  and  sharing  co-equal  right  with  the  sev- 
eral States  to  tax  every  thing  else,  the  Fed- 


Federal  Taxes  and  State  Expenses.  69 

eral  autonomy  possesses  resources  for  revenue 
almost  inconceivably  great,  while  the  slender 
resources  of  the  States,  shared  as  these  are 
with  the  Federal  autonomy,  seem  relatively  of 
but  trifling  value — mere  dregs  and  riffraff  of 
the  national  wealth, — made  up  for  the  most 
part  of  taxes  on  little  property  valuations  of 
less  than  $5,000  each.  And  yet,  out  of  these 
meagre  resources,  the  several  States  are  obHged 
to  defray  the  whole  expenses  of  the  general 
civil  administration  which  upholds  the  political 
fabric  of  civil  society,  compared  with  which 
the  corresponding  necessary  expenses  of  the 
Federal  government  for  like  purposes  in  time 
of  peace,  are  but  as  "  a  drop  in  the  bucket." 
And  when  we  consider  that  in  addition  to  the 
cost  of  the  civil  administration,  the  aggregate 
and  collective  State,  county,  township,  city, 
and  other  form  of  municipal  debts  (*'  instru- 
mentalities ? ")  in  the  several  States,  exceeds 
in  total  amount  that  of  the  national  debt,  the 
contrast  between  the  two  becomes  more  "strik- 
ing still.  Such  contrast  between  the  practical 
resources  for  accomplishing  the  equally  neces- 
sary and  indispensable  functions  of  the  Fed- 
eral   and   State   governments  respectively,   is 


JO  Federal  Taxes  and  State  Expenses, 

only  paralleled  by  that  between  the  colossal  ac- 
cumulations of  personal  property  by  single  in- 
dividuals and  private  corporations  on  the  one 
hand,  and  the  relative  poverty  of  97  out  of 
every  100  tax-payers  disclosed  by  the  tax  list 
of  a  single  county  in  Indiana,  and  inferentially 
corroborated  by  tax  lists  of  other  counties 
throughout  the  United  States,  on  the  other 
hand.  Both  these  classes — the  very  rich  and 
the  relatively  poor — have  been  produced  under 
the  same  unequal  and  oppressive  system  of 
taxation,  and  fairly  represent  its  work  in  the 
opposite  directions  of  making  the  rich  richer, 
and  the  poor  poorer.  Tabular  statements  from 
this  tax  list  will  be  found  in  a  subsequent  chap- 
ter, verifying  the  statement  already  made,  that 
97  numerical  per  cent,  of  tax-payers,  assessed 
less  than  $5,000  each,  pay  in  the  aggregate  73 
per  cent,  of  the  taxes,  while  the  other  3  numer- 
ical per  cent,  assessed  $5,000  each  and  over, 
pay  the  other  27  per  cent.  Is  it  too  much  to 
say  that  for  gross  inequality  and  injustice,  this 
system  of  taxation  is  without  parallel  elsewhere 
in  the  world  ?  That  of  the  Turk  may  equal, 
but  does  not  surpass  it  in  these  characteristics. 
In  fact,  injustice  is  done  the  Turk  by  the  com- 


Federal  Taxes  and  State  Expenses,    7 1 

parison,  without  the  explanation  that,  paying 
no  attention  to  such  formalities  as  Tax  lists  or 
assessments,  he  goes  into  a  district  to  collect  a 
specific  sum,  and  makes  short  work  of  it  by 
falling  at  will  on  those  from  whom  he  can  get 
the  required  sum  with  least  trouble  to  himself. 
And  the  just  reproach  of  it  is  that  the  system 
is  neither  the  logical  result  of  constitutional 
provisions,  nor  the  natural  outgrowth  of  Dem- 
ocratic and  Republican  institutions  under  Fed- 
eral forms,  but  has  grown  up  in  spite  of  both 
these,  under  the  despotism  of  classes  created 
by  unwarranted  exercise  of  the  Federal  power 
of  taxation  '' to  promote''  particular  interests, 
instead  of  *'  to  provide  for  the  general  welfare 
of  the  United  States.''  For  the  Constitution, 
foreseeing  the  inevitable  tendency  which  would 
load  the  Federal  autonomy  with  overwhelming 
preponderance  over  both  the  methods  and  the 
subjects  of  taxation,  while  securely  tying  its 
hands  from  interference  with  the  subjects  of 
the  several  State  administrations,  has  benefi- 
cently provided  that  its  powers  of  taxation 
shall  be  exercised  "  to  provide  for  the  common 
defence  and  general  welfare  of  the  United 
States."      These  primary  elements  of  the  na- 


72    Federal  Taxes  and  State  Expenses, 

tional  existence,  "  common  defence  "  and  "  gen- 
eral welfare,"  have  been  inseparably  blended 
in  the  constitutional  provisions  concerning 
them,  and  like  "  liberty  and  union "  in  the 
Preamble,  have  been  made  **  one  and  insepa- 
rable "  in  the  body  of  the  Constitution ;  and 
what  has  been  thus  joined  together  may  not 
be  separated  with  impunity.  The  97  numer- 
ical per  cent,  of  tax-payers  who  pay  73  per 
cent,  of  State  taxes  "  to  provide  for"  that  part 
of  "  the  general  welfare  of  the  United  States  " 
which  is  inseparable  from  the  several  State  ad- 
ministrations, will  not  always  patiently  bear  the 
burdens  put  upon  them  by  the  other  3  numer- 
ical per  cent,  who  own  the  larger  share  of  the 
property  and  pay  only  a  paltry  fragment  of  the 
taxes. 


CHAPTER  V. 

Excise  Taxes  as  Related  to  Periodical  Depressions  in  Busi- 
ness— Aggregate  Annual  State  Expenses — The  Spirits 
and  Tobacco  Taxes  Sufficient  to  Defray  Them — Mon- 
archy Cheaper  than  "Republican  Simplicity"  in  Taxes 
on  Property  Valuations. 

As  will  be  shown  in  the  course  of  the  pres- 
ent chapter,  the  aggregate  annual  expenses  of 
the  several  State  governments  amount  to  ^yy,- 
ocX),ooo  in  round  numbers,  and  those  for  coun- 
ties and  townships  or  other  form  of  county- 
subdivision,  exclusive  of  cities  and  incorpo- 
rated towns,  to  about  as  much  more,  the  total 
aggregating  $i54,cxx>,ooo,  which  is  annually- 
taken  out  of  the  value  of  property  and  wages 
paid  for  labor,  for  the  State  and  the  local  ex- 
penses named.  Is  there  just  ground  for  won- 
der that  there  are  periodical  depressions  in  all 
branches  of  business  in  the  face  of  these  facts  ? 
— that  money  is  scarce — that  wages"  are  low 
and  employment  uncertain,  and  *'  hard  times  " 
complained  of   at  almost  every  turn?     $154,- 

73 


74  Federal  Taxes  and  State  Expenses, 

000,000  a  year  needlessly  taken  out  of  what  is 
necessary  for  carrying  on  the  business  of  the 
country,  for  the  purely  incidental  purpose  of 
paying  State,  county,  and  township  or  other 
form  of  county  subdivision  expenses  (to  say 
nothing  of  the  perhaps  equal  amount  for  mu- 
nicipal expenses  of  cities  and  incorporated 
towns,  which  probably  amount  to  as  much 
more),  is  too  large  a  sum  to  be  thus  annually 
withdrawn  without  being  missed.  The  money 
withdrawn  from  business,  for  payment  of  these 
taxes,  never  gets  back  into  the  same  hands 
which  paid  it  out.  True,  its  gradual  return 
into  the  channels  of  trade  from  the  State  and 
local  disbursements  of  it,  tends  to  lessen  the 
force  of  the  shock  which  would  be  felt  if  the 
withdrawal  were  permanent ;  but  these  suc- 
cessive annual  withdrawals  culminate,  in  the 
course  of  every  seven  or  eight  years,  in  a  shock 
to  business  quite  as  violent  as  if  each  annual 
withdrawal  of  money  for  taxes  were  perma- 
nent. We  are  just  now  (in  the  first  half  of 
1886)  recovering  from  one  of  these  periodical 
depressions  in  business,  and  men  differ  in  opin- 
ion as  to  the  causes  which  occasioned  this 
depression.       Some   think   it   was   caused    by 


Federal  Taxes  and  State  Expenses,  75 

"  over-production  "  for  supply  of  the  limited 
markets,  both  at  home  and  abroad,  brought 
about  by  a  restrictive  tariff  system ;  others 
think  it  is  because  there  are  too  many  green- 
backs, while  some  think  it  is  because  there 
are  too  few  ;  and  others  yet,  mainly  among 
those  who  labor  in  mechanical  employments, 
think  all  the  trouble  comes  from  labor  being 
badly  organized,  poorly  paid,  and  not  duly  ap- 
preciated ;  while  Democrats  generally  charge 
it  to  the  Republican  party  having  been  so  long 
in  power.  But  these  should  remember  that 
the  condition  of  things  was  as  bad,  if  not 
worse,  at  the  close  of  the  eight  years'  adminis- 
tration of  that  greatest  of  all  the  apostles  of 
American  democracy — Andrew  Jackson,  in 
1837  ;  and  that  there  was  no  improvement  in 
the  succeeding  four  years  of  like  Democratic 
administration  under  Mr.  Van  Buren,  whose 
chief  claim  to  the  confidence  of  his  party  was 
his  promise  "  to  follow  in  the  footsteps  of  my 
illustrious  predecessor  " — a  promise  which  he 
faithfully  kept.  We  had  no  tariff  worth  speak- 
ing of  then,  and  as  to  greenbacks,  these  had 
not  been  thought  of,  though  the  germ  out  of 
which  these  have  since  grown  was  then  sue- 


76  Federal  Taxes  and  State  Expenses, 

cessfully  grafted  into  the  national  system  of 
finance  as  a  distinctively  Democratic  party 
measure,  in  the  form  of  "  The  Independent 
Sub-Treasury  Act,"  which  remains  to  this  day 
without  substantial  change,  as  perhaps  the 
most  valuable  boon  that  has  been  conferred 
upon  the  country  in  the  form  of  a  purely  parti- 
san measure,  by  any  administration  that  has 
shaped  the  policy  or  controlled  the  destiny  of 
the  republic.  But  if  the  Sub-Treasury  act  of 
that  day  gave  us  no  greenbacks,  we  had  from 
other  sources  an  unlimited  supply  of  bank 
notes,  which  served  all  the  purpose  of  swelling 
the  volume  of  the  currency  ;  and  as  to  labor 
being  now  badly  organized,  poorly  paid,  and 
not  duly  appreciated,  it  is  better  off  now  in  all 
these  respects  than  it  was  then  ;  and  yet  all 
these  seem  to  have  made  no  impression,  or  to 
have  imposed  any  check  on  the  periodical  re- 
currence of  these  business  depressions.  And 
yet  while  all  this  is  so,  the  Federal  government 
is  annually  deriving  revenue  from  its  tax  on 
production  of  spirits  and  manufactured  to- 
bacco, to  the  amount  of  $133,000,000  for  the 
year  1882,  for  which  it  has  no  other  need  than 
for  relief  of  the  people  from  payment  of  State 


Federal  Taxes  and  State  Expenses.  77 

and  county  taxes,  which  seem  to  He  at  the  bot- 
tom of  all  the  trouble  ;  and  at  the  time  of  the 
reduction  of  the  tax  on  manufactured  tobacco 
from  16  to  8  cents  per  pound  in  March,  1883, 
the  rate  of  receipts  from  the  spirits  and  to- 
bacco taxes  was  aggregating  $144,000,000  a 
year,  and  may  be  expected  to  reach  that  rate 
again  if  the  tobacco  tax  be  restored;  or  if  both 
the  spirits  and  tobacco  taxes  be  properly  ad- 
justed, to  produce  the  whole  $154,000,000 
needed  for  payment  of  the  yearly  taxes  on 
property  valuations  for  State  and  township  or 
other  form  of  county  subdivision  taxes  through- 
out the  United  States. 

It  may  be  stated  as  indisputable  fact  that  the 
Federal  government  has  no  longer  need  for 
these  spirits  and  tobacco  taxes,  except  to  ap- 
ply them,  under  its  constitutional  obligations 
"  to  provide  for  the  general  welfare  of  the 
United  States,"  to  the  payment  of  the  expenses 
of  the  general  civil  administration  under  sepa- 
rate State  authority,  for  State,  county,  and 
township  or  other  form  of  county  subdivision 
purposes,  to  which  the  States  are  unable  to 
subject  them ;  and  that  the  Federal  govern- 
ment would  be  better  off  without  them  for  any 


78  Federal  Taxes  and  State  Expenses. 

other  purpose.  So  general  is  the  impression 
that  the  Federal  government  has  no  other  use 
for  these  taxes,  that  it  may  be  said  to  amount 
to  popular  conviction,  and  it  has  even  been 
suggested  in  influential  quarters  to  repeal  the 
internal  revenue  act  under  which  these  taxes 
are  collected,  simply  because  the  government 
has  no  further  use  for  them.  Instead  of  thus 
throwing  them  away,  why  not  use  them  in  the 
way  of  doing  the  most  good  that  can  be  done 
with  them,  viz.,  to  relieve  existing  burdensome 
State  taxes  on  property  valuations  and  busi- 
ness enterprise  ?  Every  person  who  pays  a 
tax  under  State  tax  laws,  whether  farmer,  mer- 
chant, laboring  man,  railroad  or  railroad  man, 
capitalist  or  non-capitalist,  bank  or  banker,  or 
any  and  everybody  else,  has  a  direct  pecuniary 
interest  in  this  question  which  may  be  meas- 
ured by  the  amount  of  State  and  county  taxes 
he  has  to  pay.  Some  few,  very  few,  indeed,  of 
all  these,  have  a  deep  interest  in  maintaining 
the  present  hard  system  of  State  taxes ;  but 
these  are  too  small  in  number  and  too  trifling 
as  elements  in  the  social  or  national  existence, 
to  be  allowed  to  hinder  so  great  a  good  to  the 
whole. 


Federal  Taxes  and  State  Expenses,   79 

Under  the  Federal  system  the  burden  of  the 
general  civil  administration  in  the  creation, 
regulation,  and  modification  of  the  rights  of 
property,  the  protection  of  life  and  person,  and 
the  punishment  of  offences  against  all  these  ;  the 
maintenance  of  social  order ;  the  providing  for 
the  general  public  needs  and  conveniences  in 
the  construction  of  highways  and  bridges,  pub- 
lic buildings  for  the  State  legislative,  judicial, 
and  executive  departments,  salaries  of  public 
officers,  asylums,  and  other  public  charities ; 
support  of  common  schools,  and  all  else  of  ex- 
clusive State  jurisdiction,  which  is  interwoven 
with  and  inseparable  from  "  the  general  wel- 
fare of  the  United  States,"  as  distinguished 
from  that  of  particular  classes  of  the  popula- 
tion,— all  these  rest  primarily  upon  the  several 
State  governments,  and  is  mainly  borne  by 
direct  State  taxes  on  property  valuations,  ex- 
cept in  the  small  number  of  cases  otherwise 
provided  for  in  the  Federal  Constitution.  The 
enormous  cost  of  this  general  civil  administra- 
tion is  defrayed  to  the  extent  of  $313,000,000 
annually,  by  direct  State  tax  on  property  val- 
uations, according  to  the  census  report  of  1880  ; 
but  how   much  is  to  be  added  to  this  from 

UNIVER8ITT 


8o  Federal  Taxes  and  State  Expenses, 

polls  and  other  specific  taxes,  not  governed  by 
valuation,  the  census  report  does  not  show. 
This  enormous  taxation,  almost  exclusively  on 
account  of  what  is  inseparable  from  **  the  gen- 
eral welfare  of  the  United  States,"  is  paid  out 
of  taxes  on  property  valuations,  under  conflict- 
ing State  tax  laws,  which  are  powerless  to  tax 
effectually  either  production  or  consumption  of 
such  luxuries  as  spirits  and  manufactured  to- 
bacco, or  incomes  from  colossal  accumulations 
of  personal  property.  Such  is  the  condition  of 
things  under  Federal  forms,  without  co-opera- 
tion in  the  exercise  of  concurrent  Federal 
and  State  powers  of  taxation  "  to  provide  for  " 
the  general  welfare,  in  which  both  these  powers 
have  mutual  and  reciprocal  interest. 

Man-afraid-of-his-horses !  Those  who  are 
afraid  of  exercise  of  concurrent  powers  of  Fed- 
eral and  State  taxation  over  production  of 
spirits  and  manufactured  tobacco,  for  lessening 
the  burdens  of  State  taxes  on  property  valua- 
tions, seem  as  the  counterpart  of  the  noted 
Sioux  chief  of  this  name.  There  is  no  doubt 
of  the  horse — and  a  good  one — equal  to  the 
task  required  of  him  — and  not  fit  for  any  other 
— and  yet  afraid  of  him  for  the  only  thing  he  is 


Federal  Taxes  and  State  Expenses,    8 1 

fit  for — they  might  as  well  have  no  horse. 
What  is  the  use  of  concurrent  Federal  and 
State  power  of  taxation,  if  the  one  has  no  need 
of  it,  and  the  other  is  not  able  to  use  it  alone, 
and  yet  afraid  to  use  it  in  conjunction  with  the 
other?  Concurrent  rights  to  tax  a  subject  over 
which  one  of  them  has  otherwise  exclusive 
jurisdiction,  gives  to  the  other  no  right  to  do 
any  thing  else  with  it ! 

In  single  autonomies  or  non-Federal  govern- 
ments, whether  a  monarchy  as  in  England  or  a 
republic  as  in  France,  where  the  whole  power 
of  taxation  is  vested  in  a  single  legislative 
body,  tax  on  production  and  consumption  of 
spirits  and  manufactured  tobacco,  and  on  in- 
comes from  whatever  source,  whether  from 
property  in  the  public  debt  or  other  source, 
has  been  found  more  advantageous  to  the  gov- 
ernment and  less  burdensome  to  the  people 
than  taxes  on  property  valuations  for  support 
of  the  general  civil  administration  in  them, 
which  corresponds  with  that  of  the  several 
States  in  our  Federal  system.  The  practice 
of  the  British,  and  of  most  Continental  gov- 
ernments, in  taxing  the  production  of  spirits 
and  manufactured  tobacco,  may  be  worth  the 
study  of  our  own  ;  the  tax  on  the  products  of 


82  Federal  Taxes  and  State  Expenses, 

breweries  and  distilleries  in  England,  and  the 
government  monopoly  of  tobacco  factories  in 
France,  not  only  sufficing  to  defray  the  ex- 
penses of  the  civil  administration  correspond- 
ing to  that  of  the  several  State  governments 
with  us,  but  to  supply  a  revenue  to  the 
national   treasury   besides. 

Before  establishment  of  the  Federal  Consti- 
tution, the  several  States  were  as  complete 
national  autonomies  as  either  of  the  countries 
named,  and  each  of  them  could  tax  the  pro- 
ductions of  all  the  others  when  brought  into 
it,  without  regard  to  whether  such  products 
were  taxed  if  made  by  its  own  citizens.  Sec. 
2  of  Art.  IV.  of  the  Federal  Constitution  has 
stripped  the  several  States  of  this  autonomous 
right  of  discrimination,  and  substituted  for  it 
interchangeable  and  reciprocal  rights  of  trade 
and  privileges  of  citizenship  among  citizens  of 
the  several  States  (and  it  may  be  added  here 
that  the  provisions  of  Sec.  2  of  Art.  IV.  consti- 
tute the  dividing  line  and  mark  the  distinction 
between  autonomous  and  Federal  governments 
in  respect  to  taxation),  and  the  result  of  this 
stripping  the  several  States  of  autonomous 
rights  and  substituting  others  in  place  of 
them,  is  such  that  the  effect  of  a  State  tax  on 


Federal  Taxes  and  State  Expenses.  83 

production  of  the  luxuries  named,  is  to  sup- 
press production  instead  of  obtaining  revenue 
from  it,  by  driving  the  industry  out  of  the 
State  into  some  other  in  which  no  tax,  or  a 
less  one  on  production  exists.  In  this  way 
the  several  States  have  lost  these  sources  of 
revenue,  and  while  left  without  other  substi- 
tute for  them  than  taxes  on  polls  and  prop- 
erty valuations,  or  other  check  on  their  ac- 
knowledged evils  than  is  to  be  found  in 
specific  taxes  on  licenses  for  retail  traffic  in 
them,  the  Federal  government  has  acquired  a 
monopoly  of  taxing  them  without  other  limit 
than  its  own  discretion.  There  are  few,  if  any, 
of  the  States  which  derive  any  revenue  from 
either  spirits  or  manufactured  tobacco  applica- 
ble to  the  general  expenses  of  the  State  gov- 
ernment. None  of  them  get  a  revenue  from 
tobacco  for  any  purpose,  while  that  derived 
from  spirits  seems,  as  a  rule,  to  be  considered 
too  trifling  to  be  reckoned  among  the  reliable 
sources  of  State  revenue  for  general  purposes, 
and  is  put  on  the  same  footing  as  that  derived 
from  fines  and  penalties  for  misdemeanors,  and 
is  applied  solely  to  special  uses.  In  Indiana  it 
goes  to  the  school  fund,  and  is  not  found  on 
the  tax  Hst  in  any  of  the  counties. 


CHAPTER  VI. 

Constitutional  Compensations  for  Loss  of  State  Power  of 
Excise — The  State  Governments  as  "Instrumentalities" 
in  Respect  of  the  General  Welfare  of  the  United  States 
— Groundless  Assumption  of  Antagonism  between  the 
States  and  the  Federal  Autonomy — Effect  of  State  Taxes 
on  Property  Valuations  on  "  the  Labor  Class  "  in  Cities — 
Groundless  Complacency  of  Americans  in  Respect  to 
Taxes  on  Property  Being  Less  in  the  United  States  than 
Elsewhere — Why  These  Are  Greater  Here  than  Anywhere 
Else. 

That  the  several  States  should  have  relin- 
quished to  the  Federal  autonomy  the  sources  of 
revenue  detailed  in  the  preceding  chapter,  and 
at  the  same  time  retained  full  responsibihties 
for  maintaining  the  essential  elements  of  "  the 
general  welfare  of  the  United  States/'  as  the 
same  are  involved  in  the  general  civil  adminis- 
tration under  the  several  State  governments, 
could  have  been  done  only  on  one  or  the  other 
of  the  two  following  grounds,  viz. : 

First.  Because  the  effect  of  Sec.  2  of  Art. 
IV.  was  not  foreseen  ;  or 

Second.  Because,  as  seems  the  more  logical 
84 


Federal  Taxes  and  State  Expenses,  85 

reason,  it  was  done  on  the  faith  of  the  con- 
current and  collateral  undertaking  on  the  part 
of  the  Federal  authority,  **  to  provide  for  the 
common  defence  and  general  welfare  of  the 
United  States." 

These  words,  "  common  defence  "  and  "  gen- 
eral welfare,"  seem  obviously  to  stand  by  way 
of  substitution  and  antithesis  for  that  separate 
defence  and  separate  welfare  of  each  which, 
before  establishment  of  the  Federal  Constitu- 
tion, each  State  had  been  obliged  to  provide 
for  itself.  On  any  other  interpretation  of  them 
(see  Par.  i.  Sec.  8,  Art.  I.),  the  several  States 
must  be  deemed  to  have  alienated  their  best  re- 
sources for  both  separate  defence  and  separate 
welfare,  and  to  share  equally  with  the  Federal 
authority  all  others  which  were  left  to  them, 
without  receiving  any  equivalent  for  them  in 
respect  to  these  primary  elements  of  State 
existence.  This  would  be  absurd,  if  not  shock- 
ing to  the  moral  sense.  If  the  general  welfare 
of  the  people  of  all  the  several  States  in  equal 
degree  be  not  meant  by  the  provisions  of  this 
paragraph,  then  their  common  defence  cannot 
be  meant  by  them  ;  for  both  these  primary 
and  essential  elements  of  the  national  existence 


86  Federal  Taxes  a7id  State  Expenses. 

stand  on  the  same  footing  in  them.  There 
would  be,  too,  this  further  anomaly,  viz.  :  that 
the  people  of  the  several  States  would  be  under 
Federal  government  without  constitutional  ob- 
ligation to  provide  for  that  general  welfare 
which  pertains  to  all  of  them  in  common,  and  at 
the  same  time  without  other  resources  for  that 
which  is  distinct  and  peculiar  to  each,  than 
resort  to  taxes  on  polls  and  property  valua- 
tions, under  separate  State  tax  laws,  to  secure 
it.  And  such  is  their  condition  to-day,  and 
this  condition  must  be  perpetual,  unless  it  be 
changed  by  such  interpretation  of  the  provi- 
sions of  Par.  I  of  Sec.  8  of  Art.  I.,  as  shall 
authorize  Congress  to  make  the  proposed  dis- 
tribution (or  some  equivalent  one)  of  the  pro- 
ceeds of  the  Federal  tax  on  production  of 
spirits  and  manufactured  tobacco. 

If  either  of  the  causes  above  referred  to,  or 
both  in  conjunction  with  others,  have  con- 
curred to  produce  the  result  of  giving  to  the 
Federal  authority  exclusive  control  of  concur- 
rent powers  of  taxation  over  subjects  peculiarly 
fitted  for  State  and  local  control,  and  least 
adapted  to  those  of  a  Federal  character,  the 
obvious  way  to  restore  this  lost  equilibrium  in 


Federal  Taxes  aiid  State  Expenses,   8  7 

concurrent  powers  of  taxation,  would  seem  to 
be  modification  or  amendment  of  the  act  of 
Congress  under  which  such  monopoly  of  con- 
current powers  is  exercised.  A  change  in  the 
internal  revenue  act  of  Congress,  directing  the 
Secretary  of  the  Treasury  to  distribute  the 
nett  proceeds  of  these  taxes,  at  stated  periods, 
to  the  several  State  treasurers,  in  proportion 
to  the  State  populations,  would  effect  this 
result,  and  practically  restore  to  the  States  the 
fruits  of  their  lost  power  of  excise  taxation. 

Nor  can  there  be  any  reasonable  ground  of 
objection  to  the  Federal  government  using 
the  several  State  governments,  or  their  fiscal 
systems  or  officers,  as  instruments  for  carrying 
its  constitutional  purposes  into  effect,  though 
there  can  be  none  but  economical  reasons  for 
limiting  the  exercise  of  its  powers  to  use  of 
State  systems  or  officers  in  this  case.  The 
practice  has  been  too  long  established,  and  is 
too  strongly  fortified,  both  by  precedent  and  by 
experience  of  its  advantages,  to  be  now  ob- 
jected to.  The  direct  taxes  levied  by  Con- 
gress for  carrying  on  the  last  war  with  Great 
Britain,  were  collected  under  State  systems  of 
tax  collection  in  some  of  the  States.     The  dis- 


88    Federal  Taxes  and  State  Expenses, 

tribution  of  surplus  revenue  among  the  several 
States  under  the  act  of  Congress  approved 
June  26,  1836,  was  made  through  State  instru- 
mentahties,  and  daily  examples  of  the  use  of 
State  systems  and  State  instrumentalities  by 
the  Federal  authority  in  carrying  out  its  pur- 
poses may  be  found  in  the  use  by  the  Federal 
courts  of  the  rules  of  practice  and  proceeding 
established  by  State  laws.  So  nearly  the  whole 
machinery  for  taking  the  Federal  census  statis- 
ics  is  solely  of  State  provision,  that  if  dispensed 
with,  the  Federal  share  of  it  would  hardly 
be  worth  retaining,  except  as  to  enumeration 
of  population.  In  short,  the  use  of  State 
systems,  and  even  of  State  officers,  has 
been  so  often  resorted  to  by  the  Federal 
government  for  effecting  its  purposes  in  deal- 
ing with  the  several  States,  that  it  is  matter  of 
surprise  that  an  assumed  antagonism  between 
the  Federal  and  State  authorities  should  have 
been  made  the  ground  and  occasion  for  strip- 
ping the  latter  of  an  important  share  in  con- 
current power  of  taxation,  which  has  been 
already  referred  to.  The  numberless  instances 
of  mutual  and  concurrent  good-will  between 
the  Federal  and  State  authorities  in  the  close 


Federal  Taxes  and  State  Expenses,    89 

political  inter-dependence  between  them, 
broken  by  but  a  single  resort  to  arms,  and 
that  probably  caused  more  by  groundless  ju- 
dicial assumption  of  its  absence  than  by  any 
thing  else,  sufficiently  attest  its  survival  over 
all  attempts  to  destroy  it,  and  that  the  whole 
country  would  welcome  resort  to  it  for  effect- 
ing the  proposed  exercise  of  concurrent  Federal 
and  State  powers  of  taxation  by  Congress  in 
using  the  several  State  governments  as  instru- 
ments for  distributing  the  Federal  taxes  from 
production  of  spirits  and  manufactured  to- 
bacco. If  some  of  the  States  should  refuse  to 
accept  their  distributive  shares  of  these  taxes, 
as  was  done  in  the  case  of  the  surplus  revenue 
distribution  during  Jackson's  administration 
(Act  of  June  26,  1836),  a  provision  to  the  effect 
that  such  renounced  distributive  shares  should 
be  treated  as  lapsed,  and  for  that  be  added  to 
the  total  of  some  future  distribution,  might 
strongly  dissuade  from  such  renunciation,  as 
well  as  avoid  all  occasion  for  claiming  the 
amount  at  a  later  period,  as  was  the  case  with 
some  of  the  States  under  the  Act  of  June  26, 
1836. 
But  we  are  not  left  to  logical  inferences,  or 


90    Federal  Taxes  and  State  Expenses, 

to  precedents  alone  on  the  right  of  the  Federal 
authority  to  make  use  of  State  instrumentalities 
to  effect  its  purpose  under  the  Federal  Con- 
stitution ;  for  the  right  of  the  Federal  govern- 
ment to  use  them  in  respect  both  to  direct 
taxes  on  polls  and  lands  and  to  excise  taxes 
on  consumption,  was  urged  as  an  argument  in 
favor  of  ratifying  the  Federal  Constitution  by 
the  requisite  number  of  States.  See  Federalist, 
No.  XXXVL,  pp.  5,  6,  and  7. 

The  following  paragraphs  are  copied  from 
the  number  referred  to,  viz» : 

"  But  there  is  a  simple  point  of  view  in  which 
this  matter  may  be  placed,,  that  must  be  alto- 
gether satisfactory.  The  national  legislature 
can  make  use  of  the  system  of  each  state  within 
that  state.  The  method  of  laying  and  collecting 
this  species  of  taxes  in  each  state,  can,  in  all 
its  parts,  be  adopted  and  employed  by  the 
Federal  government. 

"  It  has  been  very  properly  observed  by  dif- 
ferent speakers  and  writers  on  the  side  of  the 
Constitution,  that  if  the  exercise  of  the  power 
of  internal  taxation  by  the  Union,  should  be 
judged  beforehand  upon  mature  consideration, 


Federal  Taxes  and  State  Expenses,    9 1 

or  should  be  discovered  on  experiment,  to  be 
really  inconvenient,  the  federal  government 
may  forbear  to  use  it,  and  have  recourse  to 
requisitions  in  its  stead.  By  way  of  answer  to 
this,  it  has  been  triumphantly  asked,  why  not 
in  the  first  instance  omit  that  ambiguous  power, 
and  rely  upon  the  latter  resource  ?  Two  solid 
answers  may  be  given :  the  first  is,  that  the 
actual  exercise  of  the  power  may  be  found  both 
convenient  and  necessary ;  for  it  is  impossible  to 
prove  in  theory,  or  otherwise  than  by  the  ex- 
periment, that  it  cannot  be  advantageously  ex- 
ercised. The  contrary,  indeed,  appears  most 
probable.  The  second  answer  is,  that  the  exist- 
ence of  such  a  power  in  the  Constitution  will 
have  a  strong  influence  in  giving  efficacy  to 
requisitions.  When  the  States  know  that  the 
Union  can  supply  itself  without  their  agency, 
it  will  be  a  powerful  motive  for  exertion  on 
their  part." 

This  authority  ought  to  settle  the  question 
of  co-operation  between  the  Federal  and  State 
systems,  both  in  collecting  and  in  applying  inter- 
nal taxes  of  all  sorts.  If  State  systems  may  be 
used  in  collecting  Federal  taxes  for  general  pur- 


92    Federal  Taxes  and  State  Expensee, 

poses,  there  can  be  no  ground  for  objection  to 
their  being  used  for  applying  them  to  a  common 
purpose  in  which  both  systems  have  mutual 
and  reciprocal  interests. 

In  the  estimates  for  aggregate  annual  State, 
county,  and  township  or  other  form  of  county 
subdivision  expenses  throughout  the  United 
States,  those  for  cities  and  incorporated  towns 
will  be  excluded,  because  these  ought  not,  for 
obvious  reasons,  to  be  included  in  the  proposed 
distribution  as  distinct  from  the  counties  or 
townships  of  which  they  form  part.  The 
direct  relief  to  State,  county,  and  township 
tax-payers  in  these  communities  will,  however, 
be  as  sensibly  felt  as  in  the  others ;  for  besides 
relief  from  direct  taxes  on  property  valuations 
for  State,  county,  and  township  or  other  form 
of  county  subdivision  purposes,  these  cities 
and  incorporated  towns  may  succeed  to  the 
right  of  taxing  licenses  for  retail  traffic  of  all 
sorts  now  monopolized  to  greater  or  less  ex- 
tent for  State  and  other  local  uses  ;  and  as  the 
retail  traffic  in  spirits  and  manufactured  to- 
bacco is  mainly,  and  in  most  States  exclusively, 
carried  on  in  cities   and   incorporated  towns, 


Federal  Taxes  and  State  Expenses,  93 

the  revenue  from  licenses  for  carrying  it  on 
may  be  expected  to  supply  no  inconsiderable 
sums  to  such  as  shall  elect  to  resort  to  it  in- 
stead of  abolishing  it  altogether. 

But  though  the  city  and  incorporated  town 
expenses  will  not  be  included  in  the  estimates, 
the  fact  that  the  amount  of  these  has  been 
limited  to  two  per  cent,  per  annum  of  assessed 
valuation  of  taxable  property,  by  constitu- 
tional amendment  in  many,  if  not  in  most,  of 
the  States,  seems  to  indicate  that  the  two  per 
cent,  per  annum  rate  of  tax  on  property  has 
been  as  generally  reached  for  city  and  incor- 
porated town  purposes,  as  for  State,  county, 
and  township  purposes ;  thus  making  the  an- 
nual rate  of  tax  on  valuation  for  all  purposes, 
four  per  cent,  per  annum  for  that  larger  num- 
ber of  tax-payers,  who  live  in  cities  and  incor- 
porated towns,  as  compared  with  the  number 
who  live  outside  of  them,  and  all  of  it  direct. 
And  when  we  come  to  consider  that  the  whole 
"  labor  class,"  technically  so  called  in  all  dis- 
cussions of  the  relations  of  capital  to  labor,  em- 
ployed in  manufacturing  and  other  business 
enterprises,  live  in  cities  and  incorporated 
towns,  and  have  to  pay  these  four  per  cent. 


94  Federal  Taxes  and  State  Expenses, 

taxes  on  their  homes  and  Httle  property  valua- 
tions out  of  their  wages,  we  may  obtain  from  it 
the  clew  to  much  that  has  not  been  hitherto 
accounted  for  in  the  attempts  made  to  explain 
the  causes  of  what  is  commonly  styled  "  labor 
troubles."  Of  course,  the  force  of  what  is  now 
stated  will  depend  on  the  completeness  with 
which  it  shall  be  shown,  in  subsequent  chapters, 
that  the  rate  of  tax  on  valuations  for  State, 
county,  and  township  or  other  form  of  county 
subdivision  purposes,  does  reach  the  two  per 
cent,  per  annum  stated,  which  for  the  present 
is  assumed  without  proof.  To  this  end,  tabu- 
lated statements  of  a  county  tax-list  will  be 
submitted  to  show  the  rate  of  tax  on  valuation; 
and  the  reader  will  be  left  to  the  guidance  of 
his  own  judgment  as  to  how  far  this  may  reflect 
the  condition  of  things  appearing  on  the  face 
of  the  tax  lists  of  other  counties,  throughout 
the  United  States. 

It  is  anticipated  that  close  scrutiny  of  the 
statistics  of  direct  taxes  on  valuations,  through- 
out the  United  States,  will  show,  if  ever  made, 
that  the  annual  rate  of  State  taxes  exceeds, 
rather  than  falls  short  of,  two  per  cent,  per 
annum.      And  when  we  take  into  account  the 


Federal  Taxes  and  State  Expenses,   95 

unwarranted  exemption  of  property  in  the  pub- 
lic debt  by  act  of  Congress,  and  the  practical 
exemption  of  the  production  and  consumption 
of  luxuries,  together  with  incomes  of  individu- 
als and  private  corporations,  from  any  share  in 
the  burden  of  State  and  local  taxes,  the  result 
seems  more  monstrous  still.  I  say  ''  unwar- 
ranted exemption  of  property  in  the  public 
debt  by  act  of  Congress,"  because  while  Con- 
gress has  the  right,  in  its  discretion,  to  exempt 
this  subject  from  taxes  for  all  purposes  of  ex- 
clusive Federal  jurisdiction,  it  has  no  right  to 
exempt  it  in  terms,  from  the  concurrent  tax 
jurisdiction  of  the  several  States,  or  to  refuse 
its  co-operation  to  subject  the  others  named  to 
taxation  for  such  local  purposes  of  the  general 
civil  administration  as  are  not  identified  with 
"  the  general  welfare  of  the  United  States." 
And  in  this  connection  it  seems  pertinent  to 
repeat,  that  under  constitutional  governments 
elsewhere,  whether  autonomous  or  Federal,  ex- 
emption of  property  in  the  public  debt  from 
taxes  for  support  of  the  general  civil  adminis- 
tration, does  not  exist ;  but  this  sort  of  prop- 
erty is  put  on  a  footing  of  equality  with  others 
in  respect  to  such  taxes. 


96   Federal  Taxes  and  State  Expenses. 

Americans  are  acccustomed  to  talk  compla- 
cently among  themselves  about  the  vast  sums 
of  money  paid  every  year  for  support  of  roy- 
alty, and  the  large  salaries  to  chief  officers  of 
state  under  the  British  and  other  Continental 
monarchies,  and  the  relatively  small  ones  paid 
to  chief  magistrates  and  other  public  officers 
under  our  republican  forms,  without  apparent 
consciousness  that  the  wide  difference  between 
our  own  and  foreign  countries  in  these  respects, 
grows  out  of  American  exemption  from  taxes 
of  the  subjects  and  sources  from  which  the 
larger  expenses  of  other  governments  are  de- 
rived. It  would  be  simply  impossible  fo^  these 
to  maintain  their  more  costly  forms  of  the 
civil  administration,  if  the  means  for  defraying 
the  expense  of  them  were  derived,  as  with  us, 
from  direct  taxes  on  polls  and  property  valua- 
tions, and  from  v/hich  both  production  and 
consumption  of  spirits  and  manufactured  to- 
bacco, together  with  all  incomes  and  property 
in    the   public   debt,    are    exempt. 

At  the  annual  meeting  of  the  American  Bar 
Association,  held  at  Chicago  in  August,  1879, 
the  President  is  reported  to  have  said  in  the 
course  of  his  address  : 


Federal  Taxes  and  State  Expenses,    97 

"We  are  a  boastful  people  ;  we  make  no  end 
of  saying  what  great  things  we  have  done  and 
are  doing;  and  yet  behind  these  brilliant  shows 
there  stands  a  spectre  of  halting  justice,  such  as 
is  to  be  seen  in  no  other  part  of  Christendom. 
So  far  as  I  am  aware,  there  is  no  other  country 
calling  itself  civilized  where  it  takes  so  long  to 
punish  a  criminal  and  so  many  years  to  get  a  final 
decision  between  man  and  man.  Truly,  we 
may  say  that  justice  passes  through  the  land  on 
leaden  slippers.  One  of  our  most  trustworthy 
journalists  asserts  that  more  murderers  are 
hanged  every  year  by  mobs  than  are  executed 
in  the  course  of  law."  And  in  the  same  con- 
nection the  eminent  and  distinguished  lawyer  is 
further  reported  to  say,  that  the  ratio  of  num- 
ber of  lawyers  to  total  population  in  the  United 
States  is  as  I  to  909 ;  while  in  France  the  ratio 
is  but  as  I  to  4,762,  and  in  Germany  i  to  6,423. 
Putting  these  two  things  together — viz.  :  the 
very  slow  progress  of  American  courts  in  the 
dispatch  of  business,  and  the  great  number  of 
lawyers  to  aid  and  assist  them — the  intended 
inference  seems  to  be  that  the  great  preponder- 
ance in  ratio  of  lawyers  to  population  has  some-, 
thing  to  do  with  bringing  about  the  deplorable 
state  of  things  depicted. 


98    Federal  Taxes  and  State  Expenses. 

With  the  very  greatest  deference  and  respect 
for  the  high  authority  of  the  President  of  the 
Bar  Association  (and  this  declaration  is  sincere 
rather  than  formal)  we  cannot  concur  with  him 
in  his  inferences  ;  and  this  because  his  ratio  is 
based  on  number  of  lawyers  and  population, 
instead  of  on  number  of  lawyers  and  number  of 
distinct  jurisdictions.  Under  our  Federal  sys- 
tem these  distinct  jurisdictions  correspond  in 
number  with  that  of  States,  Territories,  and  the 
District  of  Columbia — forty-eight  in  all, — each 
of  them  having  both  original  and  final  jurisdic- 
tion in  matters  of  life,  liberty,  and  property, 
while  there  is  but  a  single  like  jurisdiction  in 
either  France  or  Germany.  If  ratio  in  numbers 
rather  than  fact  and  form  of  government  and 
institutions  is  to  determine  this  grave  and  puz- 
zling question,  we  shall  have  to  take  some  one 
of  these  forty-eight  distinct  jurisdictions,  instead 
of  the  whole  number,  for  comparison  with 
France  and  Germany, — a  process  the  distin- 
guished President  of  the  National  Bar  Associa- 
tion will  hardly  feel  disposed  to  go  through 
with  in  view  of  any  practical  value  likely  to  be 
found  in  its  results.  No  :  neither  the  shame 
nor  the  injustice  so  graphically  portrayed  grows 


Federal  Taxes  and  State  Expenses,    99 

out  of  our  having  too  many  lawyers  ;  but  both 
of  them  come  of  our  having  too  few  courts. 
And  the  reason  of  our  having  too  few  courts  to 
keep  up  with  the  demands  upon  them  is  in  our 
not  being  able  to  pay  the  cost  of  additional 
ones  out  of  the  meagre  resources  for  revenue 
from  polls  and  property  valuations.  Possibly 
the  number  of  Federal  courts  might  even  be 
lessened  without  serious  inconvenience.  If  we 
could  avail  ourselves  of  the  immense  and  little 
burdensome  internal  excises  on  production  of 
spirits  and  manufactures  of  tobacco,  and  on  in- 
comes, for  expenses  of  the  civil  administration, 
as  is  done  in  both  France  and  Germany,  we 
might  double  both  the  number  and  the 
efficiency  of  our  courts,  and  at  the  same  time 
dispense  with  taxes  on  polls  and  valuation  for 
any  thing  but  local  and  peculiar  purposes, 
without  at  all  increasing  the  number  of  lawyers. 
And  the  courts  might  then  be  able,  "  in  the 
course  of  law,"  to  do  all  the  hanging  now  done 
by  the  mob  without  any  regard  to  it.  It  seems 
hardly  too  much  to  say,  that  not  one  of 
the  European  monarchies  could  survive  the 
principle  of  American  taxation  for  its  support 
for  a  single  year.     In  not  one  of  them  is  the 


lOO    Federal  Taxes  and  State  Expejises, 

rate  of  tax  on  valuation,  for  support  of  the  civil 
administration,  so  high  as  in  the  United  States; 
and  it  is  thus  that  we  throw  away  the  advan- 
tage of  simpHcity  in  republican  forms  under 
Federal  institutions,  by  engrafting  upon  them 
the  most  burdensome  and  unequal  system  of 
taxation  as  yet  extant  among  civilized  nations. 
The  qualifying  term  '^ per  capita,''  used  in 
connection  with  the  rate  of  tax  on  valuations 
in  the  above  paragraph  of  the  first  edition,  has 
been  eliminated  from  it  in  this  one,  as  being 
immaterial  for  the  practical  use  intended  by 
the  author,  as  well  as  because,  except  to  the 
close  student,  it  is  misleading.  It  was  "  bor- 
rowed "  from  tax  statistics  generally  accepted 
and  in  vogue,  purporting  to  give  the  relative 
rate  of  taxes  in  the  United  States  and  in  foreign 
countries,  and  is  now  returned  with  small 
thanks  for  the  loan  of  it.  The  author  has  no 
further  use  for  it  in  the  connection  in  which  he 
used  it.  Not  that  he  regards  that  use  as  hav- 
ing been  proved  to  be  wrong  by  those  who 
have  devoted  themselves  to  that  task ;  (for  he 
does  not ; )  but  that  he  regards  its  retention  as 
tending  to  weaken  the  proper  statement  of  the 
case. 


Federal  Taxes  and  State  Expenses,    loi 

The  rate  of  tax  on  valuations  has  no  neces- 
sary connection  with  extent  of  territory,  or 
nambers,  or  sparseness,  or  denseness  of  the 
population  which  has  to  pay  the  tax.  The 
usual  2  per  cent,  rate  of  tax  on  valuations  in 
a  State  or  county  having  5,000,000  population 
and  $100,000,000  valuation,  will  yield  the  same 
gross  amount  of  annual  revenue,  as  in  a  State 
or  county  having  the  same  valuation,  but  double 
the  number  of  population.  Both  the  rate  of 
the  tax,  and  the  gross  amount  of  it,  will  be  the 
same  in  each  case  ;  but  if  the  term  "  per  cap- 
ita "  be  introduced  to  juggle  with,  the  relative 
rate  of  the  tax  in  the  two  cases,  may  be  made 
to  appear,  to  the  uninitiated,  to  be  double  in 
the  five  million  population  what  it  is  in  the 
ten  million  one.  Or  if  legitimate  use,  and  not 
juggling,  be  the  purpose  of  its  introduction, 
the  only  use  it  can  be  made  to  serve,  is  the 
purely  speculative  one,  of  showing  the  relative 
denseness  or  sparseness,  or  increase  or  decrease 
of  population  within  definite  periods,  or  the 
ratio  of  wealth  to  population,  rather  than  the 
relative  rate  of  tax  on  valuation.  Its  use  for 
any  other  purpose  connected  with  the  rate  of 
tax  on  valuation,  is  as  putting  the  cart  before 


I02    Federal  Taxes  and  State  Expenses, 

the  horse ;  and  even  for  the  purely  speculative 
purposes  named,  at  least  as  good,  if  not  better 
and  more  serviceable  means  may  be  readily 
found  {guessing,  for  instance).  And  as  use  of 
this  term  for  expressing  either  the  national,  or 
the  international  rate  of  the  Hotchpotch  of 
taxes  of  all  sorts  among  those  who  have  to 
pay  them,  as  distinguished  from  that  of  the 
single  tax  on  valuations,  can  serve  no  other 
practical  end  or  purpose  than  to  ensnare  or 
beguile  the  unwary,  or  to  mislead  and  entrap 
even  the  professional  expert  and  grave  politi- 
cal doctor,^  it  would  seem  that  it  should  not  be 
longer  suffered  to  "  lag  superfluous  on  the 
stage,"  but  be  consigned  to  the  congenial  limbo 
of  exploded  humbugs  and  stale  speculative 
theories,  and  the  like  other  useless  and  worn- 
out  things. 

*  An  example  of  this  may  be  found  in  the  following  extract 
from  a  somewhat  extended  criticism  of  the  first  edition,  in  the 
New  York  Commercial  Advertiser  of  Dec.  2,  1887 — a  journal 
supposed  to  be  candid,  and  known  to  be  influential  in  the  dis- 
cussion of  public  questions.  The  preliminary  part  of  this 
criticism,  in  which  about  every  offence  known  as  against 
"  good  form,"  as  well  as  the  graver  ones  of  ignorance  of  the 
subject,  and  personal  dishonesty  in  the  treatment  of  it,  are 
freely  imputed  to  the  author,  is  omitted,  as  not  being  material 
to  the  force  of  the  example  ;  viz.  : 

"  In  the  discussion  of  such  subjects  a  man  has  no  right  to 


Federal  Taxes  and  State  Expenses.    103 

make  a  misstatement.  For  example  he  "  (the  author,)  "  remarks 
that  our  taxation  is  wholly  anomalous  under  governments  else- 
where in  the  world." 

If  the  author  made  this  statement,  (which  he  doubts,)  he 
deserved  to  be  criticised  for  making  it  without  adding  next  after 
"  anomalous,"  the  words  as  compared  with  that.  The  merest 
dunce  ought  to  know  that  "  our  taxation  "  could  find  no  foot- 
ing "  under  governments  elsewhere  in  the  world."  That  our 
critic  failed  to  see  this  while  searching  as  with  a  microscope 
for  defects  of  both  form  and  substance,  shows  him  incapable 
of  properly  doing  the  duties  of  his  office  :  but  he  proceeds  to 
say  : 

"  And  on  page  75,  [first  edition],  goes  so  far  as  to 
say,  '  in  not  one  of  the  European  monarchies  is  the  per  capita 
tax  on  valuations  for  the  support  of  the  civil-service  adminis- 
tration so  high  as  in  the  United  States.'  " 

All  which  is  to  be  taken  subject  to  two  material  exceptions 
to  the  accuracy  of  quotation,  viz.:  that  the  definite  article 
"the"  has  been  interpolated  by  the  critic  next  before  "sup- 
port," and  that  the  term  "civil-service  administration"  can- 
not be  found  on  page  seventy-five,  nor  as  the  author  believes, 
on  any  other  page  of  the  book.  So  the  critic's  severe  rule 
about  making  "  a  misstatement,"  seems  to  go  for  nothing,  un- 
less for  others.  He  evidently  does  not  respect  it  himself  ;  but 
proceeds  to  say  further  :  "  The  fact  is  that,  while  owing  to  the 
vastness  of  our  territory  and  comparative  sparseness  of  our 
population,  this  ought  to  be  true,  the  reverse  is  true." 

This  short  sentence,  of  twenty-seven  words,  in  nearly  a  col- 
umn of  irrelevant  matter,  contains  all  this  critic  has  to  say 
about  the  relative  rate  of  tax  on  valuation  for  support  of  the 
civil  administration  in  the  United  States  and  in  European 
monarchies  ;  and  if  the  author  were  disposed,  (as  he  is  not,)  to 
accept  the  challenge  which  the  critic's  imputation  of  dishon- 
esty offers,  he  might  retort  the  charge  of  falsehood,  as  well  as 
that  of  "misstatement."  But  as  such  recrimination  is  not 
helpful  for  eliciting  truth,  the  author  is  content  to  say,  that 
the  critic  has  mistaken  the  meaning  of  the  statistics  which  he 
quotes  as  authority.      There  are  no  statistics  of  taxation  extant^ 


I04    Federal  Taxes  and  State  Expenses. 

to  support  the  Advertiser^ s  statement  in  the  premises  ;  for  it 
is  incredible  upon  any  showing  of  human  testimony,  short  of 
the  completeness  of  mathematical  demonstration,  that  if  from 
the  total  tax  ott  valuation  in  any  one,  or  in  all  the  European 
monarchies,  the  national  expenses  for  war,  army,  navy,  foreign 
intercourse,  church  establishment,  pensions,  etc.,  be  deducted, 
the  balance  left  for  expenses  of  the  civil  administration  corre- 
sponding to  our  own  separate  State  administration,  shall  show 
a  higher  rate  of  tax  on  valuation,  than  is  shown  in  any,  or  in 
all  the  several  States  with  us,  for  like  purposes.  If  this  be 
true,  what  use  is  made  of  the  immense  total  of  import  duties, 
excise,  and  other  taxes  not  governed  by  valuation,  collected  in 
these  monarchies  ?  And  yet  the  Advertiser  says  all  this  is 
true  ;  and  when  mildly  remonstrated  with  by  the  author  as  to 
the  extravagance  of  his  statement,  has  seriously,  but  evasively 
attempted  to  reaffirm  it,  by  crafty  and  evasive  use  of  the  fol- 
lowing words  in  the  issue  of  Dec.  lo,  1887,  viz.:  "  We  under- 
stood Mr.  Jones  perfectly  well  not  to  include  army  and  navy 
expenses  ;  he  distinctly  says  '  civil  administration.'  We  de- 
ducted the  naval  and  military  expenses  from  taxation  in  all 
instances,"  etc. 

But  from  what  sort  of  "taxation"?  The  contention  is  as 
to  tax  on  valuation  for  expenses  of  the  civil  administration  ; 
(the  parallel  of  our  State  taxation  ; )  and  the  author's  words  of 
remonstrance  were  "gross  taxes  on  valuation,"  for  this  pur- 
pose. This  weak  attempt  to  evade  the  vital  issue  virtually 
surrenders  the  Advertiser' s  case  :  and  thereupon  it  is  iterated 
and  confidently  reaffirmed,  that  " /;«  not  one  of  the  European 
monarchies  is  the  rate  of  tax  on  valuation  for  support  of  the 
civil  administration  so  high  as  in  the  United  States." 

And  from  the  showing  of  the  analysis  of  a  county  tax-list, 
given  on  pages  140  and  141  of  this  edition,  this  seems  to 
indicate  that  73  per  cent,  of  the  total  taxes  on  valuation  paid 
in  the  United  States,  for  expenses  of  the  civil  administration, 
is  paid  by  property  owners  assessed  less  than  $5,000  each  ; 
while  the  great  and  overwhelming  bulk  of  national  wealth  in 
the  hands  of  individual  possessors  of  it  in  assessments  of  $5,000 
each  and  upwards,  pay  but  the  fragmentary  balance  of  27  per 


Federal  Taxes  and  State  Expenses.    105 

cent.  This  is  not  guess-work.  Its  verification  rests  upon 
facts  disclosed  by  the  only  examination  that  has  ever  been 
made  of  the  subject  :  and  the  only  ground  left  for  discussion 
about  it,  is  as  to  whether  the  examination  made  in  one  place, 
affords  a  fair  indication  of  the  probable  result  of  like  ex- 
aminations when  made  in  other  places. 

This  departure  from  established  usage,  in  noticing  for  refu- 
tation the  adverse  criticism  of  one  of  the  most  able  and  influ- 
ential of  the  daily  press,  is  deemed  to  be  warranted  by  the 
circumstances  of  the  case.  For  if  the  book  is  wrong  on  the 
point  of  the  Advertiser" s  criticism,  it  may  be  set  down  as 
practically  worthless  on  others  also.  But  if  right  on  this  one, 
the  fact  of  its  being  so  gives  additional  force  to  others  no  less 
novel  in  themselves.  The  author  knows  too  well,  and  holds 
too  highly  the  value  of  press  criticism  in  the  premises,  to  be 
either  offended  or  discouraged  by  them.  On  the  contrary  he 
both  invites  and  challenges  them.  For,  as  in  the  economy  of 
life,  it  is  only  after  the  bare  grain  has  been  ground  between 
the  upper  and  the  lower  mill-stones  and  afterwards  * '  bolted 
and  sifted  "  that  the  staff  of  life  can  be  obtained  from  it,  so 
the  book  which  cannot  go  through  the  ordeal  of  candid,  or 
even  of  uncandid,  criticism,  neither  can  nor  ought  to  live. 


CHAPTER  VII. 

State  Expenses  and  Distributive  Shares  of  the  Spirits  and  To- 
bacco Taxes — Absurdity  of  Separate  State  Taxes  for 
Purposes  of  the  General  Welfare,  and  Free  Interstate 
Intercourse  for  Purposes  of  the  Federal  Autonomy — The 
**  Rock  and  Vulture." 

The  following  tabulated  statement  has  been 
prepared  for  the  purpose  of  showing  the 
expenses  of  the  several  State  governments  for 
the  year  1882,  exclusive  of  those  for  counties, 
townships,  or  other  form  of  county  subdivision, 
cities,  and  incorporated  tdwns,  and  also  to 
show  the  distributive  shares  of  the  several  States 
in  the  proposed  distribution  of  the  Federal 
tax  on  production  of  spirits  and  manufactured 
tobacco,  on  the  basis  of  census  population  and 
estimated  total  annual  receipts  of  $144,000,000. 
This  estimated  total  coincides  with  the  annual 
rate  of  receipts  from  these  two  subjects  at  the 
time  the  tax  on  tobacco  was  reduced  from 
i6c.  to  8c.  a  pound  in  March,  1883,  and  which 
can  hardly  fail  to  be  realized  again  if  that  tax 
106 


Federal  Taxes  and  State  Expenses,  107 

be  restored ;  and  the  State  expenses  for  1882 
have  been  taken,  because  that  year  corre- 
sponds more  nearly  in  point  of  time  with 
the  period  of  highest  development  of  this 
taxation. 

The  territories  and  the  District  of  Columbia 
have  not  been  included  in  this  statement,  for 
the  reason  that  the  expenses  of  the  general 
civil  administration  in  them  are  paid,  in  part  at 
least,  from  the  national  treasury,  instead  of 
from  taxes  on  polls  and  property  valuations,  as 
in  the  several  States.  For  this  reason  State 
populations  only  have  been  used  in  ascertain- 
ing the  several  distributive  State  shares,  and 
the  fractional  parts  of  a  dollar  have  been  dis- 
regarded. The  total  State  population  by  the 
census  of  1880,  is  49,379,340,  and  the/^r  capita 
rate  of  distribution  very  nearly  $2.92,  but  dis- 
regarding the  large  fraction,  that  of  $2.91  has 
been  used.  The  sums  in  the  column  for  State 
expenses  have  been  taken  from  the  "  American 
Almanac  "  for  1883,  ^"<i  the  author  acknowl- 
edges with  satisfaction,  that  to  this  invaluable 
collection  of  yearly  statistics,  he  is  indebted 
for  the  first  hint  or  suggestion  which  has  led  to 
the  preparation  of  these  pages. 


id^ Federal  Taxes  and  &ate  Expenses, 

States  Expenses  for  1882  Distributive  shares 

Alabama $918,589  $3,763,889 

Arkansas 1,331,130  2,335,347 

California 4,418,362  2,516,259 

Colorado 279,565  565,491 

Connecticut 1,646,432  1,812,057 

Delaware 94,259  426,629 

Florida 361,201  784,224 

Georgia i,7i3,5o7  4,4^7,743 

Illinois 3,167,121  8,956,604 

Indiana 3,766,603  5,756,855 

Iowa 1,257,131  4,727,629 

Kansas 814,907  2,898,638 

Kentucky 1,946,747  4,797,687 

Louisiana i,75o,555  2,735,242 

Maine 1,435,460  1,888,408 

Maryland 1,757,469  2,720,684 

Massachusetts 8,113,860  5,188,777 

Michigan 2,951,513  4,765,286 

Minnesota 1,015,861  2,272,049 

Mississippi 848,165  3,292,947 

Missouri 1,430,869  6,309,895 

Nebraska 533,757  1,316,489 

Nevada 321,078  181,019 

New  Hampshire 461,101  1,009,743 

New  Jersey 1,104,308  3,291,572 

New  York 13,896,198  14,791,154 

North  Carolina 496,720  4,073,272 

Ohio 4,977,189  9,306,360 

Oregon 272,598  408,574 

Pennsylvania 5,024,766  12,463,212 

Rhode  Island 794,685  804,705 

South  Carolina 745,129  2,867,129 

Tennessee 631,651  4,488,264 

Texas 1,769,879  4,631,989 

Vermont 582,053  1,641,989 

Virginia. 2,816,859  4,401,564 

West  Virginia 797,612  1,789,704 

Wisconsin 1,186,307  3,828,096 


Federal  Taxes  and  State  Expenses,  109 

The  census  report  for  1880  shows  that  the 
total  aggregate  taxes  on  property  valuations, 
under  State  tax  laws,  for  all  purposes,  viz. :  for 
State,  county,  township,  or  other  form  of 
county  subdivision  purposes,  including  cities 
and  incorporated  towns,  amounted  to  $313,- 
000,000,  in  round  numbers,  for  that  year.  It 
is  to  be  regretted  that  in  this  official  total  ag- 
gregate of  State  taxes  on  taxable  property  val- 
uations, throughout  the  United  States,  those 
for  township  or  other  form  of  county  subdi- 
vision have  been  "  lumped,"  or  included  in 
those  for  cities  and  incorporated  towns,  so  that 
it  is  impracticable  to  ascertain  from  the  census 
report  how  much  of  this  total  aggregate  is 
peculiar  to  each.  Assuming,  however,  that 
one  half  of  the  total  aggregate  of  $313,000,000, 
viz.  $156,000,000,  to  be  on  account  of  cities  and 
incorporated  towns, — (and  this  assumption  is 
warranted  by  statistics  derived  from  other 
sources) —  and  the  other  $156,000,000  to  have 
been  paid  on  account  of  State,  county,  and 
township,  or  other  form  of  county  subdivision 
expenses,  the  Federal  excise  taxes  on  produc- 
tion of  spirits  and  manufactured  tobacco  alone 
would  suffice,  or  at  least  could  be  made  to  suf- 


I  lO  Federal  Taxes  and  State  Expenses, 

fice,  for  payment  of  these  last-named  State  and 
local  expenses  throughout  the  United  States ; 
and  this  without  State  taxes  on  any  thing  what- 
ever for  such  purposes,  whether  polls,  property 
valuations,  or  any  thing  else,  or  checking  agri- 
cultural production  of  the  constituent  elements 
of  the  taxed  productions. 

In  concluding  this  branch  of  the  subject,  it 
is  deemed  pertinent  to  remind  the  reader,  that 
this  yearly  aggregate  State  tax  of  $313,000,000 
on  property  valuations,  reported  in  the  census 
of  1880,  is  for  support  of  the  general  civil  ad- 
ministration under  exclusive  State  jurisdictions 
which  are  inseparable  from  *'  the  general  wel- 
fare of  the  United  States,"  and  is  exclusive 
both  of  poll  and  other  specific  taxes  not  gov- 
erned by  valuation,  laid  and  collected  by  sep- 
arate State  authority,  and  applicable  to  the 
same  general  purpose  ;  as  also  exclusive  of  the 
taxes  laid  and  collected  for  other  purposes  by 
the  Federal  authority.  If  all  these  be  added 
to  the  $313,000,000  aggregate  State  taxes  on 
property  valuations,  the  grand  total  would 
stagger  belief.  The  reader  is  further  reminded 
that  this  aggregate  $313,000,000  direct  State 
tax  on  property  valuations,  has  not  been  laid 


Federal  Taxes  and  State  Expenses,  1 1 1 

and  collected  equally  from  the  whole  property 
in  the  several  States,  but  only  from  so  much  of 
it  as  could  be  found  and  assessed  for  taxation, 
or  as  has  not  been  exempted  from  taxes  for 
State  and  local  purposes  by  judicial  action  or 
by  act  of  Congress.  It  represents  the  State 
and  local  taxes  paid  on  only  seventeen  billion 
dollars  money  value  that  could  be  found  and 
assessed,  as  against  probably  treble  that 
amount,  which  could  not  be  reached  by  State 
tax  laws  under  the  provisions  of  Section  2,  of 
Article  IV.,  of  the  Federal  Constitution,  or  has 
been  exempted  from  State  taxes  by  act  of  Con- 
gress. While  probably  not  a  farm  and  its  im- 
plements, nor  a  workshop  and  its  fixtures  and 
machinery,  nor  a  stock  of  goods,  nor  thousands 
of  other  equally  visible  but  little  remunera- 
tive subjects  of  value  to  their  toiling  owners, 
have  been  able  to  avoid  this  taxation,  it 
IS  impossible  to  know  how  much,  in  other 
and  invisible  forms  of  wealth,  owned  for  the 
most  part  by  those  best  able  to  bear  the 
burdens  of  State  taxes,  escapes  paying 
taxes  for  any  purpose.  How  much,  nobody 
can  tell.  We  only  know  that  while  it  is  im- 
possible for  small  property  owners  to  escape 


1 1 2  Federal  Taxes  and  State  Expenses, 

the  vigilance  of  the  State  tax  assessors,  there 
is  ample  opportunity  for  large  classes  of  wealth 
to  escape  them  ;  and  from  the  wide  discrepancy 
in  amounts  between  the  seventeen  billions  of 
taxable  property  values  that  are  found  on  the 
tax  lists  and  reported  in  the  census,  and  the 
reputed  forty-eight  or  fifty  billions  which  make, 
up  the  aggregate  national  wealth  in  all  the 
States,  we  know  that  some,  and  probably  most 
of  those  who  can  avoid  paying  taxes,  have 
been  making  the  most  of  their  opportunities 
to  do  so.  And  in  this  connection  it  seems 
pertinent  to  add,  that  the  only  possible  ground 
for  hope  of  putting  large  and  small  property 
owners  on  an  equal  footing  of  taxes  on  prop- 
erty valuations  for  State  and  local  purposes,  is 
to  be  found  in  not  taxing  the  property  of 
either.  While  the  census  statistics  of  State 
taxes  on  valuations  show  that  little  of  the 
aggregate  wealth  of  the  different  States  is 
reached  under  the  system  of  State  taxes  on 
valuations,  statistics  derived  from  other  sources 
show,  with  no  less  certainty,  that  of  the  little 
that  is  reached  by  it,  the  valuations  pertaining 
to  property  owners  of  less  than  $5,000  each, 
exceed  many  times  over  in  aggregate  amount 


Federal  Taxes  and  State  Expenses,  1 1 3 

that  of  those  of  this  amount  and  over.  This 
general  statement  will  be  sustained  by  scrutiny 
of  the  tax  list,  to  be  considered  in  a  sub- 
sequent chapter. 

Three  hundred  and  thirteen  million  dollars 
of  taxes  on  valuations,  exclusively  for  purposes 
of  the  general  civil  administration  in  the  sev- 
eral States,  is  probably  the  most  enormous 
direct  tax  practised  under  any  form  of  govern- 
ment in  the  world  for  like  purposes,  and  is 
mainly  the  result  of  our  having  retained  the 
worst  while  discarding  the  best  features  of  tax- 
ation under  autonomous  forms,  whether  mon- 
archical or  republican,  coupled  with  that  indis- 
pensable Section  2  of  Article  IV.  not  having 
been  more  closely  associated  with  its  counterpart 
in  Paragraph  i  of  Section  8  of  Article  I.  in  Fed- 
eral legislation.  These  two  constitutional  pro- 
visions afford  the  essential  marks  which  distin- 
guish Federal  from  autonomous  constitutions 
in  respect  to  taxation,  as  well  as  in  respect  to 
rights  of  trade  and  citizenship  among  Federal 
States.  Thus  far,  however,  in  the  history  of 
Federal  legislation  under  these  allied  provisions 
of  the  Constitution,  either  of  which  is  but  the 
equivalent  given  for  the  other,  while  no  atten- 


I T  4  Federal  Taxes  and  State  Expenses. 

tion  has  been  paid  to  the  one  respecting  the 
power  of  taxation,  the  other  has  been  rigidly 
enforced  in  respect  to  interchangeable  rights  of 
trade  and  citizenship  among  citizens  of  the 
several  States.  It  is  this  neglect  of  the  one 
and  this  rigid  enforcement  of  the  other  of  these 
provisions  that  has  destroyed  the  State  power 
of  excise  taxation,  and  loaded  most  of  the 
States  with  burdens  of  direct  taxes  on  prop- 
erty valuations  which  they  are  unable  to  bear; 
and  in  the  amendment  of  this  error  lies  the 
only  hope  for  materially  lessening  these  bur- 
dens, and  thereby  perpetuating  the  general 
civil  administration  under  exclusive  State 
jurisdiction    over   the   subjects   of   it. 

Neither  tariffs  for  protection,  nor  tariffs  for 
revenue,  nor  any  compromise  between  these 
two ;  nor  more  or  less  silver  or  gold  or  green- 
backs ;  nor  labor  reforms,  nor  reforms  in  the 
relations  of  labor  and  capital  to  each  other ; 
nor  reforms  in  office-holding,  nor  in  office- 
getting  ;  nor  reforms  in  methods  of  administra- 
tion ;  nor  changes  from  one  party  to  another  ; 
nor  any  other  scheme  yet  devised  or  suggested, 
can  touch  the  malady.  They  may  palliate — 
perhaps  aggravate — but  they  cannot  cure  it : 


Federal  Taxes  and  State  Expenses.  1 1 5 

and  so  long  as  we  persist  in  applying  the  prin- 
ciples of  autonomous  State  taxation  under  Fed- 
eral forms,  and  Federal  principles  of  trade  and 
intercourse  for  purposes  of  the  Federal  auton- 
omy, the  malady  will  stick  to  the  patient.  If 
all  the  remedies  suggested,  or  any  selection 
from  them,  were  put  in  practice  to-day,  the 
evils  of  direct  State  taxes  on  property  valua- 
tions, and  existing  exemptions  from  taxes 
allowed  on  production  and  consumption  of 
luxuries  and  on  incomes,  would  still  exist  and 
flourish  in  full  vigor,  though  other  essential 
interests  languish  and  die.  The  experiment 
could  but  repeat  past  experiences,  and  prove 
as  profitless  as  the  fabled  pouring  of  water  into 
the  sieve,  or  the  labor  of  Sisyphus  rolling  the 
stone,  and  leave  us  at  the  end  of  it,  but  as  the 
victim  bound  to  the  rock,  with  the  vulture 
tearing  his  vitals,  or  as  Tantalus,  dying  of 
thirst  and  hunger,  with  water  at  his  lips  and 
food  just  out  of  reach.  Nothing  but  popular 
conviction  of  the  need  for  change,  both  in  the 
methods  and  in  the  subjects  of  taxation  for 
support  of  the  general  civil  administration 
under  separate  State  authority,  can  secure  for 
the  people  of  all  the  States,  the  full  measure  of 


1 1 6  Federal  Taxes  and  State  Expenses, 

relief  provided  by  the  Federal  Constitution 
against  unequal  taxation.  These  provisions 
for  the  general  welfare  of  the  whole  people, 
without  distinction  in  interests  among  them, 
have  hitherto  been  wrested  to  that  of  classes 
of  them  only,  through  vicious  systems  of  taxa- 
tion ;  and  it  will  be  the  fault  of  the  great 
majority  both  of  interests  and  of  individual 
tax-payers,  who  have  been  thus  wronged  under 
the  forms  of  law,  if  from  want  of  concert  among 
themselves,  these  systems  and  methods  of  tax- 
ation shall  become  perpetual.  This  mingling 
of  autonomous  State  taxes  and  Federal  princi- 
ples of  free  interstate  trade  and  citizenship  for 
purposes  of  the  Federal  autonomy,  is  contrary 
both  to  the  letter  and  spirit  of  the  Federal 
Constitution. 

It  may  be  as  well  to  state  in  this  connection 
as  elsewhere,  that  with  the  meagre  resources  of 
the  States  for  defraying  current  expenses  under 
this  mongrel  system  of  taxation,  the  aggregate 
total  bonded  indebtedness  of  all  sorts  in  the 
several  States,  for  State  and  local  purposes  of 
the  civil  administration  in  them,  as  stated  in 
the  census  of  1880,  was  $1,056,406,208,  while 
the  Federal  public  debt  at  the  same  time  was 


Federal  Taxes  and  State  Expenses.  1 1 7 

$2,120,415,370,  and  that  in  the  five  years  next 
following,  while  the  Federal  debt  had  been 
reduced  more  than  one  billion  dollars  in 
amount,  the  above  total  State  indebtedness  re- 
mained substantially  unchanged.  This  ratio 
of  indebtedness  between  the  two,  and  the  con- 
trast in  reduction,  shows  that  if  the  State  in- 
debtedness shall  ever  be  materially  reduced, 
such  reduction  can  only  be  from  increased 
revenues,  which  shall  not  add  increased  State 
taxes  on  polls  and  property  valuations. 


CHAPTER  VIII. 

The  "Blair  bill"  for  Education  of  the  Illiterate— Relief  of 
the  Lettered  Poor  from  Unnecessary  State  Taxes  as  Essen- 
tial to  the  General  Welfare  as  Education  of  the  Illiterate — 
Better  Founded  in  Public  Policy — And  Not  Obnoxious 
to  the  Charge  of  Class  Legislation. 

The  following  copy  of  a  letter  from  the 
author  to  a  newspaper  for  publication,  and 
published  about  the  time  of  its  date,  is  repro- 
duced here  as  well  to  point  the  foregoing  state- 
ment of  State  debts  and  distributive  shares  as 
to  emphasize  the  proneness  of  Federal  legisla- 
tion to  run  in  the  narrow  ruts  of  class  interests 
rather  than  in  the  broad  channel  marked  out 
by  the  Federal  Constitution  for  the  general 
and  equal  good  of  all  interests,  without  dis- 
tinction of  class  or  condition  : 

To  the  Editor  of  the  Richmond  Dispatch. 

Dear  Sir  : — Some  time  in  January  my  attention 
was  attracted  to  your  discussion  of  the  *'  Blair 
Bill,"  which  proposes  the  distribution  by  Congress 
of  some  seventy  million  dollars  from  the  Federal 
spirits  and  tobacco  taxes  in  the  next  seven  years 
ii8 


Federal  Taxes  and  State  Expenses,  i  t  9 

among  the  several  States,  on  the  basis  of  illiteracy, 
to  be  used  by  the  States  only  for  educational  pur- 
poses. It  seemed  to  me  that  if  such  appropriation 
could  be  made  by  Congress  on  the  basis  of  illit- 
eracy, and  for  the  designated  benefit  of  a  particular 
class,  other  occasions  for  such  class  legislation 
might,  with  equal  propriety,  be  found,  and  so  a 
pernicious  principle  in  Federal  legislation,  which 
has  been  constant  and  uniform  from  its  beginning, 
could  now  be  made  perpetual  To  avoid  this  ob- 
jection, my  letter  to  you  proposed  that  Congress, 
instead  of  appropriating  the  meagre  seventy  million 
dollars  by  annual  instalments  through  a  period  of 
ten  years  for  education  of  the  illiterate,  should 
exercise  its  concurrent  authority  with  the  several 
States,  to  tax  the  production  of  all  sorts  of  spirits 
and  manufactured  tobacco,  and  distribute  the  net 
proceeds  of  the  whole  tax  among  the  several  States, 
on  the  basis  of  census  population,  rather  than  on 
the  basis  of  illiteracy,  to  be  used  for  the  general 
purposes  of  the  State  governments.  Instead  of 
$70,000,000  in  seven  years,  this  last  proposal 
would  provide  a  yearly  aggregate  of  not  less  than 
$150,000,000  for  general  purposes  of  the  States,  in 
perpetuity,  instead  of  for  a  single  purpose  for  a 
very  short  time,  and  each  State  might  then  meet 
claims  on  it  for  education  as  well  as  for  other 
purposes,  without  resort  to  existing  burdensome 
rates  of  taxation  on  property  valuations.  Your  ob- 
jection to  this  last-named  proposal,  as  stated  at 
the  time  in  your  columns,  was  to  the  effect  that 
the  proposal  was  in  substance  the   same  as  that 


1 20    Federal  Taxes  and  State  Expenses, 

which  had  been  proposed  by  Mr.  Blaine,*  and 
abandoned  by  him  and  his  party  without  a  word  in 
its  favor  from  either,  in  the  course  of  the  presiden- 
tial campaign  which  followed  ;  and  it  is  mainly  to 
correct  your  misapprehension  of  my  proposal  thus 
stated  by  you  that  I  now  trouble  you  with  this  letter. 
The   essential  difference  between    the   proposal 

*  The  date  1882  in  the  third  line  of  the  preface  to  the  first 
edition,  and  that  of  November  28,  1883,  on  page  121  following, 
were  intended  by  the  author  as  a  cypher,  the  key  to  which  it 
was  thought  would  be  readily  found  by  earnest  inquirers  after 
the  fact  of  authorship.  As  this  cypher  has,  however,  proved 
too  obscure  for  the  intended  use,  the  author  now  deems  it 
proper  to  disclose  both  the  cypher  and  its  key  ;  and  also  to  add 
that  he  now  has  in  his  possession  the  original  petition  to  Con- 
gress, signed  by  seventeen  petitioners,  of  whom  thirteen  are 
Democrats,  and  bearing  date  November  27,  1882,  praying 
Congress  to  distribute  the  spirits  and  tobacco  taxes  among  the 
several  States  for  expenses  of  the  State  civil  administrations, 
distinctively  upon  the  ground  of  constitutional  obligation  on 
the  part  of  Congress.  The  petition  referred  to,  however,  was 
not  submitted  for  the  action  of  Congress,  but  was  afterwards 
returned  to  the  author  by  the  member  of  the  House  of  Repre- 
sentatives having  charge  of  it,  with  the  explanation  that  upon 
conference  with  other  members  of  the  House,  it  was  thought 
best  not  to  offer  the  petition  on  account  of  its  novelty  at  that 
time.  Mr.  Blaine's  subsequent  brief  advocacy  of  such  use  of 
the  spirit  taxas  a  way  to  get  rid  of  the  then  existing  "surplus," 
seems  to  have  led  to  the  identifying  of  his  name  with  the  pro- 
posal of  the  petition — which  is  radically  different  in  principle, 
viz.  :  that  of  the  petition  proposing  definite  and  permanent 
provision  for  support  of  the  civil  administration,  while  that 
distinguished  by  association  of  Mr.  Blaine's  name  and  advocacy 
for  only  a  brief  period  proposed  only  such  aid  to  the  civil  ad- 
ministration as  might  result  from  disbursement  of  a  temporary 
surplus  in  the  Federal  treasury. 


Federal  Taxes  and  State  Expenses,    121 

contained  in  my  letter  to  you  and  that  of  Mr. 
Blaine,  as  stated  in  his  letter  to  the  Philadelphia 
Press  under  date  of  November  28,  1883,  is,  that 
my  proposal  includes  the  Federal  tax  on  produc- 
tion of  both  spirits  and  tobacco,  while  Mr.  Blaine's 
proposal  includes  the  tax  on  spirits  only.  I  believe 
you  are  right  in  saying  that  neither  Mr.  Blaine  nor 
any  of  his  party  had  any  thing  to  say  in  favor  of  his 
proposal  during  the  presidential  campaign  that 
followed  the  publication  of  it.  I  do  not,  however, 
concur  with  you  in  ascribing  this  silence  to  a  con- 
viction on  the  part  of  either  that  his  proposal  was 
thought  to  be  untenable.  Just  why  Mr.  Blaine, 
after  publishing  his  proposal  and  fortifying  it  by 
an  argument  which,  to  my  apprehension,  has  not 
been  successfully  controverted,  chose  to  abandon 
it  without  further  word  in  its  favor,  can,  in  my 
judgment,  be  explained  only  on  the  theory  that 
his  proposal  was  found,  on  further  inquiry,  to  be 
hostile  to  the  interests  and  policies  of  the  party 
which  he  came  to  represent  as  a  candidate  for  the 
presidency.  That  party  has  uniformly  sought  "  to 
promote  the  general  welfare,"  by  adjustment  of 
tariff  duties  and  congressional  legislation  in  the 
interest  of  particular  classes  ;  and  the  probability 
seems  to  be,  (for  none  can  speak  positively  of 
another's  motives,)  that  when  Mr.  Blaine  realized 
that  his  proposal  to  distribute  the  tax  on  spirits 
among  the  several  States  for  their  necessary  ex- 
penses, would  defeat  his  party's  established  policy 
of  class  legislation,  by  stripping  the  Federal  treas- 
ury of   the   funds   necessary   to  its  execution,  he 

UNlVBRsiTY 


1 2  2  Federal  Taxes  and  State  Expenses, 

concluded  that  the  best  way  out  of  the  blunder  of 
having  proposed  such  a  thing,  would  be  to  say- 
nothing  more  about  it,  in  the  hope  that  Democratic 
aversion  to  Congress  doing  any  thing  under  ''  the 
general  welfare  "  clause  of  the  Constitution,  would 
keep  them,  too,  from  disturbing  the  old  order  of 
things. 

As  to  the  "  Blair  Bill,"  it  may  be  said  that  if  not 
in  agreement  with  constitutional  provisions,  it  is  at 
least  in  harmony  with  long-established  practice 
under  them  ;  and  if  this  practice  is  to  be  perpetual, 
the  States  having  the  largest  percentage  of  illiteracy 
would  be  warranted  in  profiting  to  the  full  extent 
of  its  provisions  in  their  favor.  We,  here  in  In- 
diana, would  be  no  indifferent  beneficiaries  under 
its  provisions  if  it  shall  become  a  law  ;  though 
I  confess  to  a  feeling  of  reluctance  to  accept  the 
State's  quota  under  it  in  full  acquittance  of  a 
juster  claim  for  many  times  the  amount  of  it  on 
essentially  different  grounds. 

Very  truly  and  respectfully, 

Wm.  H.  Jones. 

Fort  Wayne,  February  6,  1885. 

To  the  brief  suggestions  of  the  last  paragraph 
of  the  above  letter  it  may  be  added  that  the 
percentage  of  those  in  the  several  State  popu- 
lations who  are  classed  as  "literate,"  but  need 
the  aid  and  co-operation  of  the  Federal  author- 
ity to  relieve  them  from  hard  and  unnecessary 
State  taxes,  is  much  larger  than   that  of   the 


Federal  Taxes  and  State  Expenses,   123 

"illiterate,"  and  their  relief  in  the  matter  of 
these  taxes  more  essential  to  "  the  general 
welfare  of  the  United  States"  than  partial 
education  of  the  "  illiterate  "  can  be.  Are  not 
the  poor  and  overtaxed  small  property  owners 
in  the  several  States,  whether  lettered  or 
illiterate,  as  deserving  beneficiaries  of  govern- 
ment appropriations  or />er  caj>zta  distributions 
from  the  Federal  treasury,  as  the  "illiterate"? 
The  obligation  of  the  Federal  government 
to  these  two  classes  of  small  property  own- 
ers on  one  hand,  and  to  the  "illiterate"  on 
the  other,  is  one  of  justice  to  the  first,  while 
only  one  of  public  policy  towards  the  other — a 
bringing  of  "tithes  of  mint,  anise,  and  cum- 
min " — as  compared  with  the  weightier  mat- 
ters of  law.  "This  ought  ye  ^o  do,  and  not  to 
leave  the  other  undone." 

The  percentage  of  overtaxed  lettered  people 
is  greatest  where  the  percentage  of  illiterate  is 
least,  and  is  by  far  the  greater  of  the  two. 
Analysis  of  county  tax-lists  throughout  the 
United  States  will  doubtless  show  this,  if  ever 
made.  Why  then  single  out  one  class  for  gov- 
ernment aid  on  the  basis  of  /fer  capita  distribu- 
tion among  its  numbers,  and  at  the  same  time 


124  Federal  Taxes  and  State  Expenses. 

leave  a  yet  larger  class  uncared  for,  and  whose 
relief  from  needless  taxes  is  quite  as  essential 
to  "  the  general  welfare  of  the  United  States," 
as  education  of  the  illiterate  can  be  ?  Besides, 
if  the  provisions  of  the  Federal  Constitution  in 
respect  to  taxation  ''  to  provide  for  the  general 
welfare  of  the  United  States,"  so  often  referred 
to  in  these  pages,  were  complied  with  towards 
all  the  people  of  all  the  States,  could  not  each 
State  then  provide  for  the  education  of  its  own 
"illiterate,"  in  accordance  with  that  social 
order  which  is  made  perpetual  in  it  by  the 
Xth  Amendment  ?  The  States  which  may  not 
need  additional  educational  facilities,  on  ac- 
count of  having  already  provided  ample  ones 
by  taxing  their  people,  are  none  the  less  en- 
titled to  th^ir per  capita  share  in  suchper  capita 
distributions  from  the  Federal  treasury,  in 
order  to  lessen  State  and  local  taxes  for  other 
public  objects,  not  less  important  or  necessary 
to  them,  than  education  of  the  illiterate  in 
other  States. 


CHAPTER  IX. 

Aggregate  State  and  Local  Public  Indebtedness — Its  Relation 
to  the  General  Welfare — State  Debts  Not  Materially 
Lessened  during  the  Period  When  the  Federal  Debt  was 
being  Practically  "  Wiped  Out  "—This  Public  Indebted- 
ness a  Subordinate  National  Debt  of  the  United  States 
— And  its  Creation  the  Result  of  Wrong  Intrepretation  of 
the  Federal  Power  of  Taxation. 

It  has  been  stated  at  the  close  of  Chapter 
VII.,  that  according  to  the  census  report  of 
1880,  the  pubHc  debt  of  the  United  States  in 
1880  was  $2,120,415,370,  and  that  the  aggre- 
gate State,  county,  and  municipal  debt  of  all 
sorts  was  $1,056,406,208  at  the  same  time. 
While  there  is  no  ground  to  suppose  that  this 
last  form  of  public  indebtedness  has  been  re- 
duced in  amount,  during  the  interval  since 
1880,  the  annual  report  of  the  Secretary  of  the 
Treasury,  for  December,  1885,  shows  that  on 
the  first  day  of  November  preceding,  the  pub- 
lic debt  of  the  United  States  had  been  so  far 
reduced  in  amount,  as  that  the  interest-bear- 
ing part  of  it  which  would  remain  after  being 
125 


126    Federal  Taxes  and  Slate  Expenses, 

credited  with  assets  applicable  to  that  pur- 
pose, would  be  many  million  dollars  less  in 
amount,  than  the  above  aggregate  of  State  and 
local  indebtedness.  The  secretary's  report  for 
the  subsequent  December,  1886,  shows  a  still 
further  and  material  reduction  in  the  amount 
of  the  public  debt  of  the  United  States,  and 
invokes  the  serious  attention  of  Congress  to 
the  reduction  of  the  Federal  revenues.  These 
official  statements  show  that  it  is  the  aggre- 
gate public  indebtedness  of  the  several  States 
which  has  now  come  to  be  the  paramount  sub- 
ject for  consideration  in  connection  with  the 
national  finances.  The  fact  that  this  aggre- 
gate State,  county,  and  municipal  indebted- 
ness has  not  been  reduced  in  the  same  ratio  as 
that  of  the  public  debt  of  the  United  States, 
but,  on  the  contrary,  has  remained  substantially 
unchanged  during  the  interval  since  1880,  can 
be  owing  to  nothing  else  than  to  a  lack  of  cor- 
responding resources  for  paying  it.  The  plain 
inference  from  there  having  been  so  large  reduc- 
tion in  amount  of  the  public  debt  of  the  United 
States  during  the  five  years  from  1880  to  1886, 
while  there  has  been  none  at  all  in  that  of  the 
aggregate  public   indebtedness   of  the  several 


Federal  Taxes  and  State  Expenses,   1 2  7 

States,  would  seem  to  indicate  a  redundancy 
of  revenues  for  the  first,  and  a  corresponding 
deficiency  of  revenues  for  payment  of  this  sec- 
ond class  of  indebtedness. 

What  shall  be  done  with  this  aggregate  State 
and  local  indebtedness,  has  thus  become  an 
important  if  not  a  vital  question  in  respect  to 
"the  general  welfare  of  the  United  States." 
The  fact  that  this  indebtedness  has  been  cre- 
ated for  objects  of  public  utility,  inseparable 
from  the  general  civil  administration  under  the 
several  States,  and  therefore  identified  with 
''the  general  welfare  of  the  United  States," 
would  seem  to  entitle  it  to  such  co-operation 
on  the  part  of  the  Federal  authority,  in  the 
exercise  of  concurrent  powers  of  taxation  with 
the  several  States,  as  will  enable  the  States  to 
apply  to  its  gradual  extinguishment  revenues 
to  which  they  are  entitled  by  virtue  of  concur- 
rent constitutional  right,  but  which  can  only 
be  made  effective  for  this,  or  any  other  pur- 
pose, by  exercise  of  the  Federal  authority. 

This  form  of  public  indebtedness  is  the 
necessary  result  of  erroneous  interpretation  of 
the  Federal  power  of  taxation,  and  withholding 
its  co-operation  with  that  of  the  several  States  to 


1 2  8   Federal  Taxes  and  State  Expenses, 

provide  for  essential  objects  of  public  utility, 
by  the  easy  methods  of  excise  taxation.  Had 
such  co-operation  between  Federal  and  State 
powers  of  excise  taxation  been  resorted  to, 
there  could  have  been  no  occasion  to  create 
this  class  of  public  indebtedness ;  but  the  fail- 
ure to  exercise  the  power  of  Federal  taxation 
concurrently  with  that  of  the  several  States, 
has  subjected  the  States  to  the  triple  alterna- 
tive of  going  without  objects  of  public  utility, 
or  of  going  in  debt  for  the  means  to  provide 
them,  or  else  of  resort  to  burdensome  rates  of 
taxation  on  property  valuations  to  provide  for 
them  :  and  this  vast  total  of  State  indebtedness 
is  the  result — a  result  which  is  wholly  anoma- 
lous under  civil  government  elsewhere  in  the 
world,  and  for  which  there  can  be  no  hope  for 
ultimate  payment,  except  from  that  co-opera- 
tion in  the  exercise  of  Federal  and  State 
powers  of  excise  taxation,  which  would  have 
avoided  the  necessity  for  its  creation.  The 
States,  counties,  and  cities  have  been  obliged 
to  create  debts  for  public  expenses,  instead  of 
paying  cash  for  them  out  of  current  revenues 
supplied  by  the  easy  methods  of  excise  taxes  on 
production  and  consumption  of  luxuries,  and 


Federal  Taxes  and  State  Expenses,  i  29 

en  incomes.  Co-operation  by  the  Federal  and 
State  authorities  in  excise  taxation  of  the  pro- 
duction and  consumption  of  spirits  and  manu- 
factured tobacco  alone,  without  resort  to  any 
other  form  of  internal  excise  taxes,  would  pro- 
vide for  indispensable  objects  of  the  general 
welfare  of  the  United  States  which  have  hither- 
to been  exclusively  supplied  by  direct  State 
taxes  on  property  valuations,  for  support  of 
the  general  civil  administration,  under  exclu- 
sive State  jurisdiction  over  the  subjects  of  it. 
Such  co-operation  seems  not  only  necessary  to 
the  ultimate  payment  of  existing  State,  county, 
and  municipal  public  indebtedness,  with  the 
same  ease  and  rapidity  with  which  the  public 
debt  of  the  United  States  has  been  extin- 
guished, but  will  remove  all  just  occasion  for 
the  creation  of  new  public  indebtedness  of  like 
character  in  future ;  or  if  it  shall  not  wholly  re- 
move the  occasion  for  creating  new  debts  for 
like  purposes,  it  will  at  least  subject  the  crea- 
tion of  them  to  the  local  control  of  tax-payers, 
both  as  to  the  amount  and  purpose  of  them. 

If  it  be  asked  whether  these  suggestions  are 
intended  to  convey  the  idea  that  it  would  be 
competent  for  the  Federal  authority  to  co-op- 


1 30     Federal  Taxes  and  State  Expenses. 

erate  with  the  several  States  In  measures  of 
excise  taxation  for  direct  payment  of  city  or 
other  municipal  debts,  it  is  answered  no ;  but 
that  the  co-operation  of  the  Federal  and  State 
authorities  in  excise  taxes  for  payment  of  State 
and  other  local  expenses  of  the  State  adminis- 
trations, would  so  far  lessen  taxes  fo'r  these  pur- 
poses, that  those  for  cities  and  incorporated 
towns  would  be  correspondingly  lighter  ;  and 
that  if  cities  and  incorporated  towns  were 
relieved  from  taxes  for  State  and  county  pur- 
poses, the  ultimate  payment  of  existing  city 
debts  might  be  assured  without  hardship  or 
possible  sacrifice  of  the  interest  of  property 
owners.  The  general  rate  of  tax  on  property 
for  both  State  and  county  purposes  In  cities,  is 
little  if  any  less  than  two  per  cent,  per  annum 
on  property  valuations  in  them,  and  that  for 
city  purposes  hardly  less  than  two  per  cent, 
additional. 

If  we  consider  the  close  relation  of  this  sec- 
ondary form  of  national  indebtedness,  to  the 
general  welfare  of  the  United  States,  and  the 
impracticability  of  paying  It  from  State  taxes 
without  large  Increase  In  the  rate  of  tax  on 
yalwations,    the    inducements    to    exercise    of 


Federal  Taxes  and  State  Expenses,      1 3 1 

concurrent  powers  of  Federal  and  State  excise 
taxes  seem  sufficient  to  compel  resort  to  it,  in 
order  to  avoid  the  alternative  of  increased  taxes 
on  property,  or  repudiation.  The  fact  that  dur- 
ing the  twenty  years  between  1862  and  1883  the 
Federal  excise  taxes  on  spirits  and  manufac- 
tured tobacco  yielded  the  enormous  aggregate 
of  $1,796,000,000  (which  was  paid  with  less 
hardship  or  difficulty  than  any  other  tax.  Fed- 
eral or  State),  and  that  the  Federal  government 
no  longer  needs  the  taxes  collected  from  these 
two  sources  for  any  other  purpose  than  to  pro- 
vide for  the  general  welfare  of  the  United 
States,  ought  to  be  decisive  of  the  proposal 
to  apply  them  to  that  purpose.  During  the 
twenty  years  referred  to,  the  national  produc- 
tion of  gold  and  silver  was  $1,298,763,792,  or 
about  a  third  less  than  the  aggregate  spirits 
and  tobacco  taxes  during  the  same  period  ;  and 
while  the  collection  of  the  latter  cost  less  than 
three  and  a  half  to  four  per  cent,  of  their  total 
amount,  the  gold  and  silver  cost,  in  other  forms 
of  value,  dollar  for  dollar  of  all  that  was  pro- 
duced. 

The   proposed    distribution   of   the   internal 
revenue  taxes  from  spirits  and  manufactured 


1 3  2     Federal  Taxes  and  State  Expenses. 

tobacco,  Avould  produce  the  effect  of  capitaliz- 
ing taxable  property  valuations  throughout  the 
United  States,  at  existing  rates  of  State  taxes 
on  them,  by  letting  the  amount  of  yearly  taxes 
on  them  remain  in  the  pockets  of  owners,  in- 
stead of  being  taken  out  of  them  for  State  and 
county  expenses.  The  abstention  from  use  of 
these  abundant  resources  for  paying  State  ex- 
penses of  the  general  civil  administration,  from 
a  fear  of  theoretical  tendency  towards  "  cen- 
tralization "  which  their  use  would  seem  to  im- 
ply, is  suggestive  of  the  boiling  of  the  kid  in 
the  mother's  milk  provided  for  its  sustenance, 
and  affords  a  parallel  to  the  case  of  the  Bourbon 
who  died  of  starvation  from  fear  of  being 
poisoned  if  he  should  eat  the  food  prepared  for 
him  in  his  own  household ;  or  that  of  the  man 
who,  accustomed  to  the  method  of  getting 
maple  syrup,  tapped  his  apple  trees  for  cider 
instead  of  expressing  it  from  the  apples  that 
grew  in  abundance  and  were  going  to  waste  on 
the  limbs  of  the  trees. 


CHAPTER  X. 

Analysis  of  a  County  Tax- List — No  Trace  of  Excise  Taxes 
Found  on  It — Three  Classes  of  Tax-Payers — Reasons  for 
Their  Classification — "Why  State  Taxes  on  Valuations  are 
Necessarily  Unequal — Difference  in  Numerical  Percen- 
tage of  the  Several  Classes — Unequal  Rates  of  Taxation 
as  Shown  in  One  Township,  Illustrate  Like  Inequalities 
in  All  the  Others — Penalties  and  Delinquencies  as  Related 
to  the  Rate  of  Tax — No  Penalty  or  Delinquency  in  the 
System  of  Excise  Taxes,  and  No  Revenue  from  Direct 
Taxes  without  Them — Proposal  to  Withhold  Protection 
of  the  Law  from  Personal  Property  Not  Listed  for  Taxa- 
ation. 

[Note  to  Second  Edition.— The  author 
never  turns  to  this  chapter,  but  the  familiar 
story  of  ''  The  Missionary  and  the  King  of 
Siam "  recurs  to  him.  Though  truer  than 
most  preaching,  the  chapter  sounds  so  Hke 
exaggeration  in  the  unaccustomed  ears  of 
some,  who,  like  the  king,  having  always  lived, 
as  it  were,  in  a  hot  climate  where  water  never 
freezes,  and  can  therefore  form  no  conception 
of  the  quality  of  ice,  at  once  fall  into  "the 
shivers  "  at  the  touch  of  the  cold  facts  of  this 
"analysis  of  a  county  tax-list."  Unable  to 
133 


134  Federal  Taxes  and  State  Expenses, 

account  for  these  facts  otherwise,  and  afraid  to 
deny,  or  openly  attempt  to  contradict  them  by 
proofs,  the  weak  resort  of  ridicule  and  scoffing 
seems  to  be  the  only  resource  left  them.  A 
noted  case  of  this  sort  of  "  the  shivers,"  is  in 
the  mind's  eye  at  this  instant ;  and  the  wild 
capers  cut  by  the  subject  of  it  at  the  bare 
touch  of  the  missionary's  ice,  are  ludicrous  in 
the  extreme. 

Though,-  like  the  king,  this  man  could 
listen  with  patience  and  apparent  belief  to 
stories  on  other  subjects  no  less  preposter- 
ous than  that  of  '*  Jonah  swallowing  the 
whale,"  he  broke  down  and  fell  at  once  into 
"the  shivers,"  on  reading  in  this  chapter  about 
the  class  of  small  property  owners  having  to 
pay  two  thirds  more  taxes  on  their  property 
valuations,  than  the  class  of  large  property 
owners  have  to  pay  on  theirs.  This  story 
proved  too  much  for  his  limited  faculty  of 
belief;  and  he  therefore  did  not  hesitate  to 
assert — as  it  was  his  privilege  to  assert  if  he 
believed  not — that  the  book  which  contained  it 
was  a  disgrace  to  the  man  who  wrote  and  pub- 
lished it. 


Federal  Taxes  and  State  Expenses,   135 

Now  the  author  himself  admits  that  it  is 
hard  of  belief — in  fact  a  thing  incredible  un- 
less amply  supported  by  proofs — that  such  a 
state  of  things  as  is  set  forth  in  this  chapter, 
should  exist  anywhere  in  the  world.  But  when 
the  proof  is  brought — the  only  sort  of  proof  the 
subject  is  susceptible  of — such  proof  as  that 
by  which  the  naturalist  safely  and  infallibly  an- 
nounces the  existence,  and  fixes  the  character- 
istics of  species,  on  examination  of  a  fragmen- 
tary specimen  of  it, — the  standing  out  against 
the  truth  thus  established,  is  like  the  refusal  of 
the  king  of  Siam  to  believe  the  missionary's 
story,  because  it  belied  his  own  limited  and 
personal  experiences  in  respect  of  rivers  freezing 
over  with  ice  strong  enough  to  bear  the  weight 
of  a  big  elephant.  Like  instances  of  incre- 
dulity have  never  failed  to  make  themselves  both 
known  and  felt,  as  obstacles  in  the  way  of  a 
great  truth  on  its  first  announcement.  The 
familiar  case  of  Lord  Bacon  still  refusing  to 
accept  the  true  theory  of  the  movements  of 
the  planets  in  space,  after  it  had  been  demon- 
strated by  aid  of  the  telescope,  may  be  used 
for  illustration.      But   earnest   inquirers   after 


136  Federal  Taxes  and  State  Expenses. 

truth,  who  had  provided  themselves  with 
telescopes,  did  not  straightway  discard  or  throw 
them  away  because  "  the  greatest,  wisest,  and 
meanest  of  mankind,"  ridiculed  and  scoffed  at 
their  use.  Perhaps,  as  he  was  "  meanest," 
though  "  wisest,"  "  his  eyes  were  holden,"  that 
he  should  not,  while  others  nobler  but  less  wise, 
should  see  this  new  glory  of  the  Heavens.  And 
so,  after  their  example,  the  author  stands  by 
this  analysis,  though  all  Lord  Bacons,  and  the 
like  of  him,  if  there  be  such,  shall  scoff  at  and 
revile  it.] 

The  following  tabulated  analysis  of  a  county 
tax-list  has  been  made  for  the  purpose  of 
showing  the  need  for  Federal  excise  taxes  on 
production  and  consumption  of  spirits  and 
manufactured  tobacco,  to  lessen,  if  not  remove, 
existing  unequal  and  insufficient  taxes  on  polls 
and  property  valuations  for  State  and  local 
uses.  The  tax  list  examined  has  not  been 
selected  with  reference  to  any  advantage  or 
disadvantage,  real  or  supposed,  which  it  may 
bear  relatively  to  other  counties  in  the  State, 
in  respect  to  rate  of  tax  on  valuation,  or  aggre- 


Analysis  of  a  County  Tax-List     137 

gate  tax  in  proportion  to  population,  or  any- 
other  element,  which  does  not  apply  as  well  to 
any  other  county  in  the  State.  Though  in  ter- 
ritorial extent  this  county  is  somewhat  larger 
than  any  other  in  Indiana,  and  contains  the 
third  city  of  the  State  in  point  of  population, 
and  is  the  second  in  manufacturing  industries, 
yet  in  other  respects,  and  particularly  as  re- 
spects agricultural  and  farming  products,  it 
may  be  accepted  as  affording  a  fair  average 
among  the  counties  of  the  State,  of  the  ex- 
isting system  of  taxation  for  State,  county,  and 
township,  or  other  form  of  county  subdivision 
purposes.  Serving  as  well  for  this  use  as  any 
other  of  the  ninety-two  counties  of  the  State, 
its  tax  list  has  been  used  for  the  purpose  of 
analysis  only  because  of  greater  convenience 
as  the  home  of  the  author.  Of  course  the 
showing  of  a  single  county  is  too  narrow  a  basis 
for  the  claim  to  national  revolution  both  in 
method  and  subjects  of  taxes  for  support  of  the 
general  civil  administration  in  all  the  States, 
and  all  that  is  claimed  for  it  is  the  seemingly 
reasonable  inference,  that  if  in  one  county  of 
the  State  direct  taxes  on  polls  and  property 
valuations  for  State,  county,  and  township  ex- 


13^     Analysis  of  a  County  Tax- List, 

penses  from  which  both  production  and  con- 
sumption of  spirits  and  manufactured  tobacco 
are  exempt,  have  been  needlessly  heavy,  un- 
equal, and  burdensome,  the  same  condition  of 
things  may  be  supposed  to  exist  in  the  other 
counties  of  the  State  under  the  same  system  of 
taxation  ;  and  if  in  one  State,  then  by  like  in- 
ference, in  other  States  also. 

So  far  as  is  known  to  the  author,  the  present 
is  the  first  attempt  to  analyze  the  State  tax-list 
of  a  county,  with  a  view  to  showing  the  prac- 
tical working  of  the  existing  State  systems  of 
direct  taxes  on  polls  and  property  valuations 
on  different  classes  of  property  owners,  and  the 
inequalities  and  individual  hardships  insepara- 
ble from  the  general  system.  That  this  is  the 
first  attempt  of  its  kind  is  stated,  as  well  to  give 
some  idea  of  the  difficulty  in  the  way  of  making 
it,  as  to  invite  fair  and  intelligent  criticism  of 
its  statements  and  conclusions  on  that  account. 

If  the  reader  shall  ask  what  warrant  exists 
for  dividing  tax-payers  into  the  three  distinct 
classes  of  railroads,  large  property  owners,  and 
small  property  owners,  the  answer  is,  that  there 
is  no  other  warrant  for  this  classification  than 
the  common  thought  of  the  people  that  these 


Analysis  of  a  County  Tax- List     139 

classes  do  exist  as  distinct  classes  among  tax- 
payers. As  to  that  of  railroads,  there  is  no  dif- 
ficulty in  distinguishing  it  from  either  or  both 
the  others,  as  its  existence  is  recent,  and  pecul- 
iar to  the  period  since  establishment  of  the 
Federal  constitution.  As  to  the  second  and 
third  classes,  however,  of  large  and  small  prop- 
erty owners,  there  is  difficulty  of  like  clear  dis- 
tinction of  one  from  the  other,  growing  out  of 
the  important  question  where  the  line  between 
them  shall  be  drawn.  In  any  event,  this  divid- 
ing line,  like  that  drawn  by  the  statute  of  limi- 
tations, or  that  in  the  statute  of  exemptions 
from  sales  under  sheriff's  executions  on  judg- 
ments founded  on  contracts,  and  numbers  of 
like  cases  in  both  civil  and  in  criminal  proced- 
ure, the  line  of  distinction  must  be  purely  arbi- 
trary ;  and  unless  it  be  supported  by  common 
assent  as  being  just  in  itself,  will  serve  to  ob- 
scure and  confuse  the  subject,  rather  than  to 
make  it  plainer.  In  the  present  case  this  divid- 
ing line  between  the  two  classes  of  large  prop- 
erty owners  and  small  property  owners,  is  drawn 
on  the  valuation  of  $5,000 ;  those  taxed  on 
valuations  of  this  sum  and  over  being  set  down 
as  large  property  owners,  while  those  taxed  on 


140    Analysis  of  a  County  Tax- List, 

valuations  less  than  $5,000  are  set  down  as 
small  property  owners.  These  two  classes  are 
thus  distinguished  from  each  other,  because 
this  distinction  seems  to  respond  more  nearly 
than  any  other  to  the  general  thought  of  peo- 
ple, that  while  a  tax-payer  who  is  worth  $5,000 
or  more  can  hardly  be  reckoned  a  poor  man, 
so  on  the  other  hand  one  who  is  worth  less 
than  $5,000  can  hardly  be  called  a  rich  one. 
The  analysis  is  therefore  made  on  this  basis, 
and  if  the  basis  shall  be  accepted  as  reasonably 
satisfactory  for  the  purpose  it  is  made  to  serve, 
there  must  be  corresponding  satisfaction  in  the 
use  made  of  it.  At  any  rate  it  can  serve  the 
purpose  of  distinction  until  some  other  basis  of 
classification  shall  be  suggested,  having  better 
grounds  to  justify  it.  But  whether  the  classifi- 
cation used  be  the  best  and  most  equal  that 
may  possibly  be  devised,  can  be  no  valid  ground 
for  objection  to  the  present  one  ;  for  the  reason 
that  none  other  that  may  be  suggested  could 
change  or  modify  the  evils  disclosed  by  this 
one  ;  and  a  single  good  point  is  sufficient  on 
general  demurrer.  It  is  hoped  this  preface  will 
sufficiently  explain  the  principles  and  the  ob- 
ject of  the  following  tabulated  statement,  viz. ; 


Scipio  Township. 


Eel  River  Township. 


Lake  Township. 


Cedar  Creek  Township, 


La  Fayette  Township. 


Jefferson  Township. 


Jackson  Township. 


Adams  Township. 


Aboile  Township. 


Wayne  Township. 


City  of  Fort  Wayne. 


O^O  '^O   O   O  N  xnirir^inC^ON   O 


^  N 

^ 

en  N 

rt 

M 

en 

M 

CO  Q  O   w 
CO  O  t~- 

inr^i^inrfmO   moO   m 

en  ON 

r^ 

M  t^  ONvO  CJ  M  r^ 

Tt  M  m 

vO   ^ 

O 

r^  ^  en  en  ONM  rf 

%'=^ 

a 

? 

enoo 

T^ 

n- 

M   in  N 

O      ONVO 

in 

en  Tf  Q   r^  r^  N   O 

oo   O  O  00  in  M   en 

M     en   C<^ 

1-  in 

in 

IT)   M     O^ 

O   en 

envo  m  ONoo  o^a  in 

M     O 

M     M 

o 

O^oo 

VD     M 

•^ 

en 

r^ 

\r> 

M 

en 

W   O  t^  O 

O     O 

O  QO 

rt  c<  c^  en  -r  m  r^ 

to  Tf  Q 

IH 

t^  c^  N  enoo  r^oo 

o 

cnvO  mvO  en  w  o 

t^  N 

ON 

M        oo   O  w 

O    M 

t^ 

00     M 

»r> 

^ 

8.^8" 

8^ 

"^  O  O   m  in«o   O  m  O 

"^O  o^  N  00  oo  en  i~>i 

tnt^  Tl- 

•«t  en 

H 

■<:t  Tt  «  in  in  d  Tf 

VO     ON 

o 

vO 

O  oo 

r->. 

CI 

<S 

en 

•"^ 

Tj- 

M   U-)  to  en 

M  oo 

N 

in 

OnvO    OnvO   O  in  O 
ONOO    -too    N    "*  ON 

o  o  •<4- 

m  in 

ON 

ino  en 

in  en 

OO 

M  m  N  r>iOO  w  Tf 

en  o 

•1   W 

M 

ONt^ 

00     M 

r-x 

M 

t^ 

in 

M 

en 

rf  m  M    M 

O  en 

IH 

O 

O  N  inco  r^oo  O 

M  oo  en 

en  M 

NO 

M     M     O     O   00   VO     t^ 

N  N  vn 

en  t->i 

M 

►H  e»  00  t^  en       M 

\0  en 

oo 

VO 

H    N 

in 

en 

M 

M 

w  u")  in  en 

Q   N  oo 

Q 

c»  M  O  r^  CI  P<  r^ 

m  r~^  en 

Q   t^  N 

Q 

0^  en  moo  oo  r^  en 

O     OMH 

O  »n 

o 

ONO    -^nC  00   n    on 

M  in  in 

8>^ 

M 

N     M   O     Tt  M 

M     N 

O 

T^  M 

en 

M 

N 

vO 

w 

O^O  "H  cnmTj-inrfONM  moo  O^mO 
r^Mr>.  oci  eninr>  r^oo  oo  m  i-i 
cno  On       -^  CI        Tj-vo  en  r^  O  t^  »-( 

c^  o"      cT  cf 


en 


00  00 


in 


en 


enO  r»minTfinO  w  enO  c<  'i-O  w 
On  en  O  Tj-vO  rj-rJ-ON'^TtinON'^ON 
Oooo       OOM        MONOMTj-ONtnvO 

M  o*  en       en  ON      oo"vo^  hToo'  t>^  cf 


r^Ovo  inmenvONOOvO  o^t->iinvo  O* 
vO  oo  r^  enoo  tj-  o^  m  m  rt  r^vo  •-'  O 
M  o^  en      M  vo  en  o*  enoo  c<  en  ^t  t^  on 

CJ      ON  "rt< 

O     M  "^ 


%^ 


&' 


•^  '^  en 

X  «  <» 

«  HH  00 

Z  g  > 

o  {J  V 

tfl  .^ 

'w  C!  7! 

^  ^  o 
o 


tn 


W    .«    O   w    r"  •*         .-H 

S^^^^fi'g^^'oo, 
?!  "^  li  ..;  **-< 


a<4)'5iu(U'ri4>a)COo 


^---  e  « 


fc/3  bJO    '  bJj  to    •   b/)  b/)^  y  ii 

<  <  iz;  <  <  ;z;  <  <<  Q  ^  <J 


Totak 

vO   0   en  TtO  0    M    0    in  0   'i-  N   ir^O   O 
Tf  w   -r^  CO  c*^co  en  CM   0  CO  in  invo  oo  -2 
'TOO        0^in»n0i-ico'^en'^cnco 
O  r-^oo"       xn  r^       ^f  >-.'  c>o'  <>  r^  o^  c^ 
w  en  M        o  w        u-ico  w  t^  o  -^       (N 

en           ef          o            ^ 

Washington  Township. 

CO  U-)  o  «  u^O  CO  O  vO  CO   O  M   en  Ocxd 
OOr^        0>enMMC>  1-O0   Tj-  t:}-  M  tn 
t^Moo        OO        MP-(r^c>Om  cno 
o"  rf       vo"  t-T        en  N        o'  i-"  m" 

oo     M             M                      -t                    CM     M 

oo                        M                        M                      O 

St.  Joseph  Township. 

cno   "rOOOmOOooOcocnoo 
Oa^N                   Mco-q-oo^i--cnr^rt- 
t^co^  0_                       O  O^vO   O  O   en  (N  »o 
oo"  ^                      vo"  cT       i-T  «  ci 

Springfield  Township. 

vO  u-)i^o  O  O  cnvnM  cnO  u^r^  qnco 

HCOCO                                Mt^MONi-HOOO 
f^CO^  "^                             COWt^O<NH.M^ 

r^  cT                   o'           M  o~  hT 

>r>                                                                        IT) 

Pleasant   Township. 

coir>MiHOTfl^u->r^OO>-(0    00 
Minxn        Oco         OcoHH  looo  en  t^  -i- 
iT)  in  o        O  en       CO  oo  mco  o  O  ci   •^ 

r^  d^       en            en            oco*  h-T 
O             a             »n            N 
in                                              rf- 

Perry  Township. 

eninM  M  ino  •-<  e^co  Oco  cnM  o^vo 
vO  O  rf  O  *+  M  r^O  in  1-1  enco  O  O 
^r^cn       O^  O^       o^cnrtooOmMN 

cT  cT       oo"  hT        c>  hT        Tt  rC 

O^  M         -f            oo              in 

in                                              rt 

Milan  Township. 

Tj-inQi-tinMCiOvOMOcnMr^'^ 
M  c>  en      vo  w        en  CM  «  ^^  o  o -^  o> 
in  cr>co       vo  CO        tn  m  m  n  r-.  o^  cm  tJ- 

O^  C^       c<^             m"             inco' 
en            Tt            M            CO 
rt                                         en 

Marion  Township. 

OOOt-fMOO^'^OMcnO'-'vONrt 

NNcn       ooinMinr^i-iOOCMOO 
rj-rj-cn       M^c^       voen^lnr~-ln^^':^ 

en  c>       t-^           CO*"  m"       r^o" 
■^           M           CO            en 

Maumee  Township. 

OOinMOr^MOior>sOencMrj-0 
O  M  CM  en  M  r^oo  O  cm  c^  vo  oo  m 
CM   w   >H         ino^        O  rj-  CM  O^  O  vO         C^ 

en  in      co"  i-T       en            i-T  en 

O             r^            M             O 

CM                                                           M 

Madison  Township. 

O^OO   C<   inO   N   inc>inO   CM    c>ih   t^ 

CMCnrt          -^O            rtOCM-t-MCMcnt^ 

in  o  o       vO  CM        r^  CM  mo  rf  O  cm  m 
in  o"       00*  cm"        r?             m"oo*  m" 

Monroe  Township. 

r^O  inM  ino^cnminenO  r^OO  O 
<:>-^M  cocM  OOOMncn  rt-co  r^ 
t^ooo       ^^       o^ent-^rtr^ocMO 

O"  o"       -f  m"      o"             cf  oo"  en 

CO  M        ■<:}■             M             in 

rt              ^                               en 

Analysis  of  the  Tax  List 

of  Allen  County,   Indiana, 

for  the  Year  1883. 

Whole  No.  of  Tax-payers      .... 

Total  valuation 

Total  tax  paid  or  delinquent .... 

No.  railroad  valuations 

Aggregate  railroad  valuations     .     .     . 

Aggregate  railroad  taxes 

No.  of  others  taxed  $5,000  and  over    . 
■Aggregate  valuation  of  these  .... 
Aggregate  tax  paid  by  them   .... 
No.  taxed  on  valuations  less  than  $5,000. 
Aggregate  valuation  of  these  .... 
Aggregate  taxes  paid  by  them     .     .     . 
Delinquent  taxes,  penalties,  etc.     .     . 

Whole  No.  of  polls 

Amount  of  pol  taxes 

Analysis  of  a  County  Tax- List     143 

The  most  noticeable  features  of  the  foregoing 
tabulated  statement  of  a  county  tax-list,  are 
the  absence  from  it  of  excise  taxes  of  any  kind, 
and  the  very  large,  or  rather  the  overwhelming 
preponderance,  in  numerical  percentage,  of 
those  who  pay  taxes  on  valuations  of  less  than 
$5,000  each,  as  compared  with  that  of  those 
who  pay  taxes  on  valuations  of  this  amount 
and  over.  Out  of  the  whole  number  of  20,446 
tax-payers  on  the  list,  only  566  pay  on  valua- 
tions of  $5,000  and  over,  while  19,880  pay  on 
valuations  less  than  $5,000.  If  there  existed 
ground  for  belief  that  the  property  of  the 
566  had  been  included  in  the  assessment  as 
completely  as  that  of  the  19,880,  there  would 
be  less  ground  for  complaint  of  inequality  in 
the  taxation. 

But  has  the  assessment  been  equally  exact 
and  complete  in  respect  to  each  of  these  two 
classes  ?  While  there  is  ground  for  belief  that 
it  has  not  been  equally  exact  and  complete, 
still  there  is  no  direct  and  explicit  proof  to  the 
contrary,  nor,  in  the  nature  of  the  case,  can 
there  be.  In  the  absence  of  direct  and  ex- 
plicit proof,  however,  to  show  that  all  the  prop- 
erty of  the  566  has  been  as  completely  found 


1 44     Analysis  of  a  County  Tax- List. 

and  assessed  for  taxation  as  that  of  the  19,880, 
the  chain  of  circumstantial  evidence  tending  to 
show  that  it  has  not  been  so  found  and  assessed, 
is  hardly  less  convincing  than  direct  and  ex- 
plicit proof  of  the  fact  would  be.  As  to  lands 
and  tangible  personal  property,  there  is  no  more 
ground  for  suspicion  of  failure  to  assess  the 
property  of  the  one  class,  than  that  of  the 
other.  The  difficulty  lies  in  finding  out  what 
is  not  visible  to  the  assessor,  and  which  on  this 
account  is  left  to  such  voluntary  disclosure  as 
the  owner  of  it  may  choose  to  make.  Its 
amount  is  an  unknown  quantity  in  the  problem 
of  direct  State  taxes,  and  which  may  be  con- 
jectured to  fill  the  wide  gap  between  the  ascer- 
tained total  valuations  of  taxable  property 
reported  in  the  census  of  1880,  as  being  seven- 
teen billions  of  dollars  in  round  numbers,  and 
that  other  perhaps  equally  reliable  but  unof- 
ficial statement,  which  reckons  the  aggregate 
wealth  of  all  the  States  at  the  same  date  at 
forty-eight  billions  of  dollars.  This  difference 
of  thirty-one  billions  of  money  value  between 
the  property  that  is  taxed,  and  that  which  is 
not  taxed, — in  itself  nearly  double  the  former, — 
demonstrates  the  inequality  of  the  system  of 


Analysis  of  a  County  Tax- List.     145 

taxation  under  which  it  is  perpetuated.  Tak- 
ing the  seventeen  and  the  forty-eight  billions  of 
dollars  as  representing  the  relative  ratio  of  ex- 
emption from  State  taxes  enjoyed  by  the  566 
and  the  19,880,  some  proximate  idea  may  be 
formed  of  the  disparity  and  inequality  between 
these  two  classes  of  tax-payers,  under  existing 
systems  of  State  taxation,  for  support  of  the 
general  civil  administration  in  the  United 
States.  It  means  simply  heaviest  burdens  of 
taxes  upon  those  least  able  to  bear  them,  and 
largest  exemptions  from  taxes  to  those  who 
stand  least  in  need  of  any  exemption  at  all 
from  taxes.  This  idea  will  be  further  illustrated 
when  we  come  to  consider  the  relative  percent- 
age of  taxes  paid  by  the  three  classes  of  tax- 
payers, as  shown  in  the  tabulated  statement  of 
the  county  tax-list.  Let  it  suffice  for  the  pres- 
ent to  say,  that  if  the  valuations  of  the  566 
should  be  increased  by  the  ratio  of  the  thirty- 
one  billions,  and  those  of  the  19,880  corre- 
spondingly lessened,  these  two  classes  of  tax- 
payers would  stand  more  nearly  on  the  footing 
of  equality  in  respect  to  taxes  for  support  of 
the  general  civil  administration  throughout  the 
United  States,  than  they  now  do. 


1 46    Analysis  of  a  County  Tax- List. 

The  difference  in  the  numerical  percentages 
of  these  classes  is  hardly  less  noticeable  than 
the  ratio  of  their  respective  aggregate  valua- 
tions to  the  total  amount  of  taxes ;  that  of  the 
less  than  $5,000  class  being  so  nearly  the  whole 
number  of  tax-payers  that  both  the  others  put 
together  make  but  an  insignificant  fraction  in 
the  100  as  compared  with  it — the  one  being 
97tV  ^^  ^Y^Q-  for  both  the  others,  while  recourse 
must  be  had  to  decirhals  of  the  unit  to  indicate 
the  percentage  of  one  of  these  two;  and  this  the 
one  most  influential  in  shaping  general  legisla- 
tion, both  in  Congress  and  in  the  State  legisla- 
tures, and  occupying  a  larger  share  of  the  time 
and  attention  of  the  courts  than  both  the 
others  put  together.  If  this  class  should  pay 
taxes  in  proportion  to  the  share  of  both  legisla- 
tive and  judicial  provision  which  it  occasions, 
there  would  be  little  ground  for  just  complaint 
by  either  of  the  others  on  account  of  high  rate 
of  taxes  on  valuations.  And  if  we  turn  from 
this  relative  numerical  percentage  of  the  three 
classes  to  that  of  total  taxes  assessed  in  each, 
that  of  this  otherwise  most  influential  class, 
though  relatively  greater  than  its  numbers 
W.ould  seem  to  indicate,  is  yet  but  trifling  in 


Analysis  of  a  County  Tax- List,     147 

comparison  with  either  of  the  other  two :  the 
percentage  of  aggregate  railroad  taxes  being 
but  6^  per  cent,  of  the  whole,  while  that  of  the 
other  two  classes  is  ig-i^  and  72iT^  respectively, 
the  largest  percentage  of  aggregate  taxes  as- 
sessed being  that  of  the  class  least  able  to 
pay  it. 

Passing  from  these  general  features  of  the 
tabulated  statement  of  the  county  tax-list  to 
particular  ones  among  townships  and  individual 
assessments,  we  find  that  the  delinquent  taxes 
pertain  exclusively  to  the  class  of  tax-payers 
assessed  less  than  $5,000  each  in  some  of  the 
townships,  and  that  if  the  rate  of  the  tax  be 
computed  on  the  amount  of  valuation  and  of 
the  amount  of  delinquency  annexed  to  it,  the 
rate  of  tax  will  exceed  the  nominal  rate  of 
taxes  on  valuation  by  the  others.  Taking 
Jackson  township  for  illustration,  we  find  the 
total  valuation  of  the  township  $156,285,  and 
the  whole  tax,  including  delinquencies  and 
penalties  for  previous  years,  $3,531.  There  is 
but  one  railroad  in  the  township,  and  but  one 
other  tax-payer  in  it  assessed  $5,000  and  over. 
Neither  of  these  two  has  any  delinquent  tax  or 
penalty,  and  we  know  from  the  tabulated  state- 


148    Analysis  of  a  County  Tax- List. 

ment  that  the  aggregate  valuation  of  these  two 
is  $44,490,  and  their  aggregate  tax  $823,  which 
is  at  the  rate  of  $1.86  tax  on  the  $100  valua- 
tion. Deducting  the  valuations  and  taxes  of 
these  two  tax-payers  from  the  aggregate  valu- 
ations and  taxes  for  the  township,  there  re- 
mains $111,795  of  valuation,  and  $2,704  of 
taxes  and  delinquencies  for  the  other  212  tax- 
payers in  the  township  to  pay,  which  is  at  the 
rate  of  $2.42.1  tax  on  the  $100  valuation,  as 
against  the  $1.86  rate  for  each  of  the  other  two 
classes  of  tax-payers. 

If  it  be  said  that  to  add  delinquencies  and 
penalties  to  the  rate  of  tax  on  valuation  is  un- 
fair, because  these  are  occasioned  by  the  fault 
or  inability  of  the  delinquent  to  pay,  rather 
than  by  any  intended  purpose  of  the  tax  law  to 
discriminate  harshly  or  unjustly  among  indi- 
viduals or  classes  of  them,  the  answer  is  that 
property  owners  do  not  willingly,  or  purposely, 
or  wantonly  incur  these  penalties  or  delin- 
quencies ;  and  that  these  preponderate  so  heav- 
ily among  the  class  of  property  owners  least 
able  to  bear  them  as  to  make  them  peculiar  to 
this  class,  shows  beyond  any  reasonable  ground 
for  doubt  that  the  system  of  taxes  under  which 


Analysis  of  a  County  Tax- List,     149 

they  are  incurred  is  unreasonable,  unjust,  and 
oppressive,  and  to  be  tolerated  only  from  im- 
perious necessity.  The  feature  of  penalties  and 
forfeitures  for  non-payment  of  taxes  is  peculiar 
to  the  system  of  direct  taxes  on  property  valu- 
ations. It  can  find  no  place  in  the  system  of 
excise  taxes  on  production  and  consumption  of 
luxuries,  or  on  incomes.  Not  only  is  the  small 
property  owner  obliged  to  submit  to  increased 
rate  of  tax  on  valuation  by  reason  of  the  non- 
assessment  of  part  at  least,  if  not  of  the  greater 
part  of  that  of  large  property  owners,  but  he 
is  liable  at  the  same  time  to  have  his  little 
property  sold  to  satisfy  the  relatively  larger 
tax  than  he  ought  in  justice  to  be  liable  for.  As 
we  have  shown  by  reference  to  the  census  and 
to  other  equally  trustworthy,  though  unofficial, 
statements  of  the  aggregate  wealth  in  all  the 
States,  not  more  than  one  third  of  this  aggre- 
gate wealth  can  be  found  and  assessed  for  tax- 
ation under  State  tax  laws  ;  and  that  the  other 
two  thirds  which  is  thus  exempted  pertains  for 
the  most  part  to  the  two  classes  most  able  to 
pay  taxes  on  it,  and  therefore  least  entitled  to 
the  exemption  from  taxes  enjoyed  by  them.  If 
this  exempted  two  thirds  could  be  found  and 


150    Analysis  of  a  County  Tax- List. 

subjected  to  taxes,  the  rate  of  tax  would  con- 
sequently be  proportionately  less  for  all  classes 
of  property  owners.  It  would  make  a  differ- 
ence of  63I  cents  in  the  dollar  to  the  class  of 
small  property  owners,  who  now  pay  this  much 
in  excess  of  what  they  would  have  to  pay  if  the 
whole  property  were  equally  taxed.  This  ter- 
rible injustice  of  obliging  the  class  of  small 
property  owners  to  pay  two  thirds  more  taxes 
than  is  paid  by  others,  or  else  submit  to  have 
their  little  properties  sold  for  default  of  such 
payment,  is  inseparable  from  the  system  of  di- 
rect taxes  on  property  valuations,  and  is  essen- 
tial to  its  efficiency.  Without  this  feature  the 
tax  list  could  be  no  more  effective  to  provide 
the  necessary  revenue  for  support  of  the  sev- 
eral State  administrations,  than  an  official  rec- 
ommendation to  all  citizens  to  make  such  vol- 
untary contributions  for  that  purpose  as  each 
might  think  he  ought  to  make.  Placed  on  this 
footing  of  voluntary  contributions,  the  State 
could  get  but  little  revenue,  or  if  any,  not  more 
than  may  be  found  in  the  box  of  the  mission- 
ary society  after  the  most  earnest  and  pathetic 
appeals.  Contrariwise,  from  the  spur  of  legal 
obligation,  as  well  as  that  of  natural  appetite 


Analysis  of  a  County  Tax- List,     151 

under  the  system  of  excise  taxes,  which  has 
neither  penalty  nor  forfeiture  for  non-payment 
of  taxes,  while  the  tax-payer  is  his  own  asses- 
sor of  the  amount  of  taxes  he  has  to  pay,  and 
also  fixes  the  number  and  periods  of  the  instal- 
ments in  which  they  are  to  be  paid,  so  as  to 
suit  himself,  the  treasury  is  kept  constantly 
filled,  and  no  man's  home  or  little  property  has 
ever  yet  been  sold  to  satisfy  an  unpaid  excise 
tax.  The  pretence,  therefore,  that  it  is  unfair 
to  include  delinquencies  and  penalties  in  the 
rate  of  taxes  on  valuation  is  groundless.  So 
far  from  being  unfair  to  hold  the  system  of 
taxes  on  valuations  responsible  for  the  relent- 
less and  remorseless  penalties  and  forfeitures 
which  it  inflicts,  it  is  but  just  to  say  of  it  that 
this  merciless  rigor  is  the  essential  condition  of 
its  existence. 

Even  upon  the  impossible  condition  that  all 
property  in  the  several  States  in  excess  of  the 
seventeen  billions  ascertained  and  reported  in 
the  census  of  1880  could  be  found  and  assessed 
in  like  manner  as  the  seventeen  billions,  the 
system  of  direct  taxes  on  valuations  would  still 
be  unequal,  as  well  because  no  uniform  and  just 
rate  for  ascertaining  equal  valuation  is  possible, 


152    Analysis  of  a  County  Tax-List, 

as  also  because  under  no  possible  conditions 
could  equal  ability  be  established  among  tax- 
payers to  pay  the  equal  taxes  assessed.  The 
inequality  and  injustice  of  penalties  and  for- 
feitures for  involuntary  deHnquency  would  still 
remain. 

The  system  of  taxation  which  can  accept  no 
excuse  for  non-payment  of  taxes  but  that  of 
penalty  and  forfeiture  is  barbarous,  because  it 
is  unnecessary.  There  is  less  excuse  for  it 
than  for  imprisonment  for  debt  under  execu- 
tion on  a  judgment  founded  on  contract.  In 
the  case  of  the  involuntary  delinquent  tax- 
payer the  ground  of  the  penalty  and  forfeiture 
is  but  an  implied  contract  on  his  part  to  pay  his 
equal  rate  of  tax  with  all  other  property  owners 
in  the  State,  and  until  the  State  has  compelled 
such  complete  assessment  of  all  the  property 
within  her  jurisdiction  she  has  no  moral  right 
to  enforce  penalty  or  forfeiture  against  delin- 
quent tax-payers ;  for  if  all  the  property  were 
assessed  the  delinquent's  rate  of  tax  would  be 
less,  and  the  penalty  and  forfeiture  the  more 
easily  avoided ;  and  it  is  shocking  to  the  moral 
sense  to  impose  penalty  and  forfeiture  for  non- 
payment  of  more  than  the  due  share.      The 


Analysis  of  a  County  Tax- List,     153 

State  may,  if  she  will,  compel  the  listing  and 
assessment  of  all  the  personal  property  within 
her  jurisdiction,  so  far  at  least  as  to  acquit  her- 
self for  all  responsibility  for  what  is  not  listed 
for  taxation,  by  withdrawing  the  protection  of 
her  laws  to  such  as  may  not  be  found  on  the 
tax  list,  and  until  she  does  this,  or  something 
equivalent  to  it,  there  can  be  no  just  ground 
for  enforcing  penalties  and  forfeitures  for  non- 
payment of  taxes  on  such  as  is  listed  for  taxa- 
tion. Such  provision  in  the  tax  laws  of  the 
several  States  would  perhaps  unearth  more  per- 
sonal property  of  the  invisible  and  intangible 
sort  that  is  carefully  hid  out  of  sight  of  the  tax 
assessors  than  now  appears  on  the  tax  -lists 
throughout  the  United  States,  even  though  it 
should  fail  to  wholly  fill  up  the  wide  gap  be- 
tween the  census  and  the  reputed  statements 
of  aggregate  wealth.  Though  such  provision 
in  the  State  tax  laws  would  not  probably  se- 
cure the  listing  for  taxation  of  all  the  intan- 
gible property  which  now  escapes  taxation  in 
the  several  States,  it  would  doubtless  double 
existing  valuations  of  this  species  of  property 
in  the  several  States,  and  in  this  way  tend  to 
lessen  existing  inequality  in  taxes ;  and  if  the 


154     Analysis  of  a  County  Tax- List, 

system  of  direct  taxes  on  property  valuations  is 
to  be  perpetual,  instead  of  the  easier  and  abso- 
lutely equal  system  of  excise  taxes  on  produc- 
tion and  consumption  of  such  luxuries  as  spirits 
and  manufactured  tobacco  being  substituted 
for  it,  nothing  less  than  the  incorporation  of 
such  provisions  in  the  tax  laws  of  the  several 
States  can  tend  to  put  large  and  small  property 
owners  on  a  footing  of  equality  in  respect  to 
State  taxes,  or  excuse  the  exaction  of  penalties 
and  forfeitures  for  non-payment  of  them. 

The  author  is  not  prepared  to  urge  the  in- 
corporation of  such  provisions  in  the  several 
State  tax  laws,  except  as  a  secondary  means  of 
relief  for  the  class  of  tax-payers  in  all  the  States 
represented  by  the  19,880  in  the  tabulated 
analysis  of  the  Allen  County  tax-list  above 
given.  This  class  would  probably  be  somewhat 
lessened  in  number,  and  that  of  the  532  be 
more  than  correspondingly  increased  under  the 
operation  of  such  provisions.  A  powerful,  if 
not  unanswerable  argument  in  favor  of  such 
provision  in  State  tax  laws  would  be  that  such 
provision  would  justify  penalties  and  forfeitures 
for  non-payment  of  taxes,  so  far  as  justification 
can  be  found  for  them,  by  putting  all  property 


Analysis  of  a  County  Tax- List,     155 

owners  on  as  nearly  equal  footing  before  the 
law  as  it  is  possible  for  the  State  to  put  them 
on,  as  respects  the  rate  of  tax  on  valuation. 
Nor  would  such  provision  in  State  tax  laws  be 
different  in  principle  from  that  of  registry  laws 
respecting  the  right  to  vote  at  State  elections. 
If  it  be  competent  for  a  State  to  provide  that 
unless  a  citizen  register  his  name  and  place  of 
residence  as  a  qualification  for  exercising  the 
right  of  suffrage,  it  must  be  equally  competent 
for  the  State  to  provide  by  law,  that  unless  he 
list  his  personal  property  for  taxation  he  shall 
not  be  entitled  to  that  protection  for  it  under 
the  law,  which  is  provided  by  taxing  the  prop- 
erty of  others.  The  principle  of  no  tax  on 
property,  no  protection  for  property  under  the 
law,  would  be  perhaps  as  well  founded  in  pub- 
lic policy  under  popular  institution,  as  that 
which  restricts  the  right  of  suffrage  to  regis- 
tered voters  ;•  at  all  events,  it  would  justify 
penalties  and  forfeitures  for  non-payment  of 
taxes,  so  far  as  justification  can  be  found,  by 
putting  all  property  owners  on  the  footing  of 
equality  before  the  law,  as  nearly  as  it  is  possi- 
ble to  put  them,  as  respects  the  rate  of  taxa- 
tion.    Such  provision  in  State  tax  laws  would 


156     Analysis  of  a  County  Tax- List, 

probably  do  more  to  solve  the  problem  of  "  the 
general  welfare  of  the  United  States,"  by  de- 
veloping both  the  strong  and  the  weak  points 
of  it,  than  any  other  that  could  be  applied  to 
its  solution,  besides  also  providing  more  reve- 
nue for  State  and  county  purposes  of  the  gen- 
eral civil  administration,  and  from  sources  and 
subjects  better  able  to  pay  it  than  even  the 
subjects  of  the  Federal  taxes,  which  it  is  pro- 
posed to  use  for  these  purposes.  Nor  does  it 
seem  extravagant  to  expect  that  the  97  in  the 
100  who  now  pay  three  fourths  of  the  taxes 
while  owning  less  than  a  third  of  the  property 
of  the  country,  will  ultimately  insist  on  the 
application  of  this  principle,  unless  the  system 
of  excise  taxes  on  production  and  consumption 
of  spirits  and  manufactured  tobacco  shall  be 
substituted  for  the  existing  system  of  partial, 
unequal,  and  direct  taxes  on  property  valua- 
tions. 

In  the  column  of  totals  in  the  tabulated 
statement,  it  will  be  seen  that  out  of  the  aggre- 
gate $418,043  taxes  of  all  sorts  paid  or  delin- 
quent for  the  year  1883,  the  rate  of  tax  on 
aggregate,  valuation  of  $9,060,556  paid  by  the 
railroads  and  532  others  assessed  $5,000  each 


Analysis  of  a  County  Tax- List,     157 

and  over,  is  a  fraction  less  than  $1.20  on  the 
$100,  while  the  rate  of  tax  paid  by  the  19,880 
tax-payers  of  the  county  assessed  less  than 
$5,000  each  on  their  aggregate  valuation  of 
$14,576,454  is  a  fraction  more  than  $2.12  on  the 
$100  of  their  aggregate  valuation.  These  fig- 
ures demonstrate  the  gross  inequality  of  the 
system,  and  show  that  while  the  railroads  and 
the  532  are  taxed  at  a  rate  which,  relatively 
with  the  19,880,  they  scarcely  feel,  these  last- 
named  are  taxed  at  a  rate  which  they  are  unable 
to  bear,  as  the  $47,465  delinquency  and  penalty 
list,  peculiar  to  this  class  of  tax-payers,  shows. 
And  when  we  consider  that  while  the  property 
and  effects  of  this  class  of  poor  or  small  proper- 
ty owners  is  such  that  it  cannot  escape  the  vigi- 
lance of  the  tax  assessors,  it  is  impossible  to  know 
how  much  more  of  that  of  the  other  two  classes 
escapes  this  vigilance  than  is  found  and  listed 
by  it,  the  enormity  of  the  discrimination  in 
favor  of  the  rich,  and  against  the  poor,  grows 
more  startling  and  apalling  still !  Surely  this 
shocking  oppression  cannot  be  longer  hid,  and 
now  that  it  has  been  brought  into  the  glare  of 
light,  there  must  be  a  cry  from  the  multitude 
of   over-taxed   poor,   potent   as  a  voice  from 


158     Analysis  of  a  County  Tax- List, 

heaven,  demanding  that  the  system  under 
which  it  has  been  practised,  under  the  delusion 
of  its  being  the  most  just  and  equal  that  the 
wisdom  of  man  could  devise,  shall  be  denounced 
and  abandoned,  as  the  most  unjust  and  unequal 
that  malignant  ingenuity  could  invent.  It  is 
with  difficulty  that  strong  nerves  and  habitual 
self-control  shall  maintain  their  equanimity  and 
self-possession  in  the  presence  of  facts  so  well 
calculated  to  arouse  indignation.  There  is  but 
the  semblance  of  apology  open  to  those  who 
may  seek  to  palliate  or  excuse  the  shocking 
picture  which  the  figures  in  this  case  present. 
But  as  it  will  be  found  both  too  narrow  and  too 
trifling  in  its  sum  and  substance,  consideration 
of  it  may  be  deferred  until  it  shall  be  brought 
into  discussion  by  its  friends. 

It  seems  to  have  become  habitual  with  some, 
who  have  no  faith  in  partial  reform  of  existing 
methods  of  injurious  taxation,  to  decry  such 
partial  agitation.  The  agitation  of  what  is 
called  the  *'  single  tax  on  land,"  with  entire  ex- 
emption of  personal  property  from  taxes,  of 
which  Mr.  George  may  be  said  to  stand  as  the 
representative,  comes  in  for  a  large  share  of  this 
habitual  denunciation.     While   the   author  no 


Analysis  of  a  County  Tax- List,     159 

more  believes  in  such  special  remedies  in  poli- 
tics than  in  nostrums  and  specifics  in  medicine, 
he  is  yet  of  opinion  that  the  constant  agitation 
of  such  partial  schemes  is,  upon  the  whole,  pro- 
ductive of  good.  It  serves  to  attract  attention 
and  thought  which  would  not  otherwise  be 
given  to  the  subject.  When  there  is  such  gen- 
eral complaint  of  overtax  on  property  values, 
that  men  get  to  forming  societies  to  counteract 
it  by  throwing  the  whole  burden  of  taxes  upon 
a  particular  class  of  property  owners,  it  may  be 
accepted  as  indicating  the  need  of  radical  re- 
form in  the  taxes.  When  whole  communities 
are  affected  with  like  symptoms  of  physical  ail- 
ment, we  do  not  doubt  there  being  something 
wrong  in  the  material  conditions  of  their  exist- 
ence. It  is  so  in  politics,  and  especially  in  the 
matter  of  taxes.  Instead,  therefore,  of  railing 
against  resort  to  the  use  of  these  "  specifics," 
the  true  method  is  to  hunt  for  the  prevalent 
cause  of  the  general  ailment,  and  to  remove  it. 
It  will  do  no  good  to  tell  a  community  afflicted 
with  prevalent  malarial  fever  that  every  mem- 
ber of  it  has  all  the  rights  of  civil  and  religious 
liberty,  and  that  he  ought  therefore  to  feel 
happy,  when  he  knows  he  is  not.     There  is  no 


i6o     Analysis  of  a  County  Tax- List 

use  in  decrying  the  use  of  "  quack  medicines  " 
when  nothing  else  is  proffered  in  place  of 
them. 

It  is  for  similar  reasons  that  the  author,  in- 
stead of  finding  fault  with  any  of  these  schemes 
of  partial  remedy,  feels  disposed  to  encourage 
rather  than  to  check  them.  But  only  so  far  as 
it  may  tend  to  ultimate  adjustment  of  all  taxa- 
tion upon  the  just  principle  that  the  aggregate 
wealth  of  the  country  (whether  it  be  in  lands. 
public  securities,  or  other  form  of  personal 
property),  rather  than  the  aggregate  average  of 
its  poverty^  shall  bear  the  brunt  of  the  taxes, 
No  adjustment  of  taxes  which  does  not  recog- 
nize this  for  its  basis,  can  be  other  than  partial, 
and  therefore  do  no  lasting  good.  Ability  to 
pay  the  tax  assessed^  rather  than  moral  or  other 
obligation  to  pay  it,  is  the  true  ground  for 
taxation  ;  for  obligation  to  pay  is  proportioned 
to  the  protection  afforded.  Hitherto  we  have 
begun  to  tax  from  the  bottom,  with  a  uniform 
rate  upwards.  Instead  of  this  we  should  begin 
on  top,  and  tax  downwards,  lessening  the  rate 
of  tax  as  we  go  down.  The  result  will  proba- 
bly be  that,  when  the  line  of  $5,000  assess- 
ments, which  now  pays  three  fourths  of  the 


Analysis  of  a  County  Tax- List,     1 6 1 

taxes  on  values,  is  reached,  there  will  be  no 
need  of  going  any  lower,  except  for  the  pecul- 
iar purposes  of  cities  and  incorporated  towns ; 
and  as  the  tax-payers  have  direct  control  of 
these,  none  but  themselves  can  be  to  blame  if 
the  tax  be  not  just  what  the  majority  of  them 
want. 


CHAPTER  XL 

Poll  Taxes— Trifling  Amount  of  These  Paid  by  the  Class  of 
Large  Property  Owners — As  Peculiar  to  the  Class  of  Small 
Property  Owners  as  Penalties  and  Delinquencies. 

The  total  of  $22,860  for  poll  taxes  in  the 
tabulated  statement  of  the  Allen  County  tax- 
list,  is  another  feature  in  the  system  of  direct 
taxes  in  no  way  less  shocking  to  the  moral 
sense  than  the  pretence  of  equality  of  tax  on 
valuations  which  has  been  unmasked  in  the  case 
of  Jackson  township  in  the  preceding  chapter. 
Though  these  poll  taxes  are  not  laid  under  any 
pretence  of  equality  in  point  of  ability  to  pay 
them,  and  are  confessedly  arbitrary  in  principle, 
yet  when  we  come  to  compare  the  percentage 
in  number  of  polls  with  that  of  amount  of 
taxes  paid  by  large  and  by  small  property  own- 
ers respectively,  we  find  that  the  disparity  be- 
tween these  two  classes  of  tax-payers,  though 
somewhat  less  than  in  the  taxes  paid  by  them 
on  valuations,  is  yet  liable  to  the  charge  of  put- 
ting the  heavier  burden  on  shoulders  least  able 
162 


Analysis  of  a  County  Tax- List.      163 

to  beai*  it,  while  another  class  of  tax-payers  is 
wholly  exempt  from  poll  taxes.  Of  the  total 
of  $22,860  poll  taxes,  only  $192  is  laid  on  79 
taxed  $5,000  and  over  ;  thus  showing  that  in 
the  matter  of  polls,  as  well  as  in  that  of  tax 
on  valuation  of  property,  it  is  those  least  able 
to  pay  who  bear  the  heaviest  burden  of  taxes. 
The  share  of  the  79  is  but  a  fraction  of  one  per 
cent,  of  the  whole  tax,  while  that  of  the  9,307 
others  charged  with  this  tax  is  more  than  99  per 
cent,  of  the  whole.  If  it  be  said  in  mitigation  of 
this  inequality,  that  but  little  of  the  amount 
laid  upon  polls  is  ever  paid,  the  answer  is  that 
the  plea  of  non-payment  is  but  proof  of  ina- 
bility to  pay,  and  establishes  the  charge  that  in 
the  greater  number  of  poll  taxes  the  tax  is 
greater  than  the  subjects  of  it  are  able  to  pay. 
This  poll  tax  is  confessedly  arbitrary  at  best, 
and  as  it  is  productive  only  in  what  it  extorts 
from  the  poor,  while  it  gets  practically  nothing 
from  the  rich,  is  obnoxious  to  the  charge  of  being 
so  purposely  framed  as  that  while  no  poor  per- 
son can  escape  its  meshes,  the  rich  pass  through 
them  in  shoals.  And  when  we  take  into  the 
account  that  more  than  99  per  cent,  of  the 
amount  collected  from  it  is,  as  a  rule,  paid  by 


164      Analysis  of  a  County  Tax- List, 

those  burdened  with  the  charge  of  rearing  fam- 
ilies in  which  every  dollar  may  be  said  to  be  of 
the  essence  of  life,  its  hardship  seems  the  more 
monstrous  still.  Surely  something  which  is  not 
essential  to  the  comfort  of  the  poor  might  be 
made  the  subject  of  a  specific  tax  neither  de- 
pending on  valuation  nor  yet  liable  to  be  af- 
fected by  Section  2  of  Article  IV.  of  the  Federal 
Constitution,  may  be  found  to  take  the  place  of 
this  odious  poll  tax,  now  almost  solely  paid  by 
the  poor,  when  paid  at  all.  Or  better  still,  if 
the  system  of  defraying  the  expense  of  the 
civil  administration  by  taxes  on  polls  and  prop- 
erty valuations  is  to  be  perpetual,  why  not  ex- 
tend to  the  poor  tax-payer  the  same  exemption 
which  is  extended  to  poor  debtors  by  the  stat- 
ute of  exemption  from  sheriffs'  sales  under  exe- 
cution on  judgments  founded  on  contracts  ? 
What  moral  right  has  the  State  to  compel  a 
judgment  creditor  to  be  more  forbearing 
towards  a  debtor  worth  less  than  $600,  than 
herself  towards  her  poor  tax  debtors?  The 
execution  creditor  of  a  debtor  worth  less  than 
$600  may  be  as  poor  or  poorer  than  his  debtor, 
but  this  circumstance  is  of  no  significance  as 
between  individuals. 


Analysis  of  a  County  Tax- List,     1 65 

It  is  true  that  the  exemption  from  taxes 
of  all  polls  and  property  valuations  of  $600 
and  less,  might  sensibly  lessen  the  aggregate 
yearly  State  revenues  without  corresponding  in- 
crease in  the  rate  of  tax  on  valuations  over  that 
amount ;  but  in  lieu  of  this,  the  deficiency 
might  be  made  up  from  tax  on  such  incomes  as 
could  be  reached  by  State  tax  on  them,  or  by 
some  specific  tax  that  could  be  enforced  with- 
out the  general  hardship  now  felt  by  a  very 
large  class  in  paying  poll  taxes  and  other  taxes 
on  valuations  which  do  not  reach  $6cx)  each. 
Though  a  graduated  State  tax  on  incomes  could 
not,  for  the  reasons  stated  in  a  previous  chapter, 
be  expected  to  operate  with  entire  success,  it 
may  at  least  be  as  equal  and  effective,  and 
certainly  far  less  oppressive  than  the  existing 
poll  tax  and  taxes  on  property  valuations  under 
$600,  and  whatever  of  inequality  may  be  found 
in  its  operation  would  at  least  be  limited  to  a 
class  of  tax-payers  better  able  to  bear  it.  What- 
ever inequality  might  be  found  in  such  State  tax 
on  incomes,  would  be  no  more  so  than  is  inher- 
ent in  existing  taxation  of  property  valuations, 
Specific  taxes  on  known  lucrative  employments 
and  occupations,  which  now  pay  no   tax   for 


1 66     Analysis  of  a  County  Tax- List. 

State  and  local  purposes,  might  be  eligible  sub- 
stitutes for  poll  and  other  taxes  which  bear 
so  heavily  on  the  poor  and  small  property 
owners. 

But  better  than  any  modification  or  amend- 
ment of  an  inherently  bad  system  of  taxes, 
would  be  the  substitution  of  some  other  in  place 
of  it,  in  which  the  vain  attempt  to  equalize 
taxes  on  partial  and  imperfect  valuations,  and 
arbitrary  taxes  on  polls,  shall  be  replaced  by 
excise  taxes  on  production  and  consumption  of 
luxuries,  such  as  spirits  and  manufactured  tobac- 
co in  the  first  place,  and  graduated  taxes  on  in- 
comes made  next  in  order  to  supply  deficiencies. 
It  is  the  just  reproach  of  the  existing  system  of 
State  taxes  on  polls  and  property  valuations  for 
support  of  the  general  civil  administration,  that 
the  poll  tax  is  as  distinctively  pecuHar  to  the 
class  of  small  property  owners  who  are  assessed 
less  than  $5,000  each,  as  is  the  delinquent  tax 
and  penalty  on  these  valuations  ;  so  that  the 
result  seems  to  be  practically  the  same,  whether 
the  great  multitude  of  97  out  of  every  100 
tax-payers  be  taxed  as  to  polls  on  confessedly 
arbitrary  principles,  or  under  the  pretence  of 
equality  in  respect  to  valuation.    Such  uniform 


Analysts  of  a  County  Tax- List,     167 

results  under  the  existing  system  of  State  taxes 
for  essential  purposes  of  "  the  general  welfare 
of  the  United  States,"  in  throwing  the  heaviest 
burdens  on  shoulders  least  able  to  bear  them, 
cannot  be  because  there  is  no  practical  differ- 
ence between  right  and  wrong  in  public  policy 
— between  equality  and  inequality, — but  because 
instead  of  there  being  either  right  or  equality, 
there  is  but  the  pretence  of  these  qualities,  in 
that  part  of  the  system  professedly  based  on 
them.  Taxes  on  valuations  can,  in  the  nature 
of  things,  only  be  equal  among  tax-payers  when 
all  the  taxable  property  of  all  classes  and  con- 
ditions in  the  State  is  listed,  valued  by  uniform 
and  inflexible  standards  of  valuation,  and  taxed 
at  like  uniform  and  inflexible  rates.  The 
absence  of  any  part  of  it  from  the  tax  list, 
necessarily  makes  the  rate  of  tax  on  that  which 
is  listed  relatively  higher  than  if  all  were  listed  ; 
and  even  if  all  should  be  listed,  the  impossibility 
of  uniform  judgment  as  to  value  among  the 
multitude  of  assessors  necessary  to  perform  l:he 
task  of  valuation,  would  still  make  equality  of 
assessment  impossible.  And  since  long  experi- 
ence under  the  system  of  direct  State  taxes  on 
polls  and  property  valuations  has  shown  that 


1 68     Analysis  of  a  County  Tax- List. 

all  the  property  in  the  State  neither  has  been, 
nor  can  be  thus  listed  for  taxation,  the  alterna- 
tive seems  to  be  the  abandonment  of  the  system 
and  substitution  of  some  other  in  place  of  it  on 
the  one  hand,  or  else  the  abandonment  of  the 
pretence  of  equal  taxes  on  the  other. 


CHAPTER  XII. 

Conclusion  upon  the  Case  Stated  in  Chapter  I. — Classification 
of  Subjects  and  Objects  of  Taxation. 

The  conclusions  to  be  drawn  from  the  pre- 
ceding chapters  seem  to  be  these,  viz. :  that  as 
there  can  be  no  complete  definition  of  "  the 
general  welfare  of  the  United  States,"  as  stated 
in  Paragraph  i  of  Section  8  of  Article  I.,  unless 
the  definition  include  in  its  terms  the  general 
civil  administration  under  separate  and  exclusive 
State  authority,  the  primary  power  of  taxation, 
to  provide  for  necessary  expenses  of  this  civil  ad- 
ministration, must  be  deemed  to  be  vested  by 
the  Constitution  in  the  Federal  autonomy,  and 
to  be  as  exclusive  of  the  like  power  in  the  sev- 
eral States,  as  that  "  to  pay  the  debts,"  or  "  to 
provide  for  the  common  defence  "  of  the  United 
States ;  and  that  as  to  the  subjects  of  the  civil 
administration  under  separate  and  exclusive 
State  authority,  which  are  not  general  and 
common  to  all  the  States  alike,  but  are  local 
or  peculiar,  the  several  States  have  a  concur- 

i6q 


THIS  BOOK  IS  DUE  ON  THE  LAST  DATE 
STAMPED  BELOW 


AN  INITIAL  FINE  OF  25  CENTS 

WILL  BE  ASSESSED  FOR  FAILURE  TO  RETURN 
THIS  BOOK  ON  THE  DATE  DUE.  THE  PENALTY 
WILL  INCREASE  TO  50  CENTS  ON  THE  FOURTH 
DAY  AND  TO  $1.00  ON  THE  SEVENTH  DAY 
OVERDUE. 


Mr-^^ 


mo 


^^Q    U  1045 


RECD  LP 


MAY  2    m/ 


MAR  1 1  2001 


>AY 

Octavo,  cloth, 

25 

avo,  cloth,  I  oo 

"t.   U.   S.   Navy. 

_      .         .         50 

M.  H.  Jaques, 

"    .       .       50 

_  By   RoPMOND 
25 
AQUEs,    Lieut. 
50 
cloth,      I  00 
tavo,  cloth,  75 
Growth.     By 
75 
_[ts  Provisions. 
.      I  25 
Analysis  of  a 
.      I  00 
i  ;  What  Part 
By  Edward 

-ERLAIN,  Rep- 
ader.     Cloth, 
40 
-and  Analysis 
),  cloth,  with 
75 
"Drdism.       By 
75 
:s  of  Russian 
?th     .     I  00 


LD  21-100m-7,'39(402 


i  London. 


YC  23204 


QUESTIONS   OF   THE    DAY 

44 — The  Present  Condition  of  Economic  Science,  and  the  Demand 

for  a   Radical   Change    in    Its     Methods    and    Aims.      By 

Edward  C.  Lunt.     Octavo,  cloth 75 

45— The    Old    South    and    The    New.      By    Hon.  W.  D.   Kelley. 

Octavo,  cloth         .         .         .         .         .         .         .         .         .     I  25 

46 — Property  in  Land.     An  essay  on  the  New  Crusade.     By  Henry 

Winn.     Octavo,  paper  .......         25 

47 — The  Tariff  History  of  the  Unit^       ^ates.     By  F.  W.  Taussig. 

Octavo,  cloth         ...  ....     I   25 

48 — The    President's   Message  h  Annotations  by  R.   R. 

BovvKER.     Octavo,  pap*-  ....         25 

49 — Essays    on    Practica'  Thkodork    Roosevelt. 

Octavo,  paper        .         .  ^  ....         40 

50— Friendly  Letters  to  '  ■' ^^^'m^  j  ^%,  '  ^^^  Others.     By  J.  S. 

Moore.     Octavo  '  ^  ^^b^-^        ....         25 

51— American  Pris'  /  "7*  '^  States  Census.      By 

Frri       ick  Daper,     ...         25 

52 — Ta*"'  .     Octavo,  paper  25 

53 — "^  .ection  which  does  not  Protect. 

-loth  .  .  .  .  .  I  00 
'  ^  ages.    By  David  A.  Wklls.    Octavo, 

"" F"t"-' — : : ' ^^ 25 

55— True  or  False  Finance.     The  Issue  of  1888.     By  A  Tax-payer. 

Octavo,  paper        .........         25 

56— Outlines  of  a  New  Science.  By  E.  J.  Donnell.  8vo,  cloth,  i  00 
57— The  Plantation   Negro  as   a   Freeman.     By    Philip   A.    Bruce. 

Octavo,  cloth         .         .          .         .         .         .         .         .          .     I  25 

58— Politics  as  a  Duty  and  as  a  Career.     Octavo,  paper  .  25 

59— Monopolies  and  the  People.  By  Ciias.  W.  Baker.  8vo,  cloth,  i  25 
60— Public   Regulation   of  Railways.     By  W.    D.    Dabney.     i2mo, 

cloth 1   25 

61— Railway   Secrecy   and    Trusts.      By  John    M.   Boxham.      Bvo, 

<-lf>th J  00 

G.  P.  PUTNAM'S  SONS,  Publishers,  New  York  and  London. 


